Did you select one set of resolutions in /opt/ltsp/i386/etc/lts.conf ?
Sometimes you have to try other ones until you find one that works.
Code:
# 60 Hz Resolutions
# X_MODE_0 = 640x480 25.175 640 656 752 800 480 490 492 525 -hsync -vsync
# X_MODE_0 = 800x600 40 800 840 968 1056 600 601 605 628 +hsync +vsync
X_MODE_0 = 1024x768 65 1024 1048 1184 1344 768 771 777 806 -hsync -vsync
# 70 Hz Resolutions (Use instead of 72 Hz for 1024x768)
# X_MODE_0 = 1024x768 75 1024 1048 1184 1328 768 771 777 806 -hsync -vsync
# 72 Hz Resolutions
# X_MODE_0 = 640x480 31.5 640 664 704 832 480 489 492 520 -hsync -vsync
# X_MODE_0 = 800x600 50 800 856 976 1040 600 637 643 666 +hsync +vsync
# X_MODE_0 = 1024x768 75 1024 1048 1192 1296 768 771 777 806 -hsync -vsync
# 75 Hz Resolutions
# X_MODE_0 = 800x600 49.5 800 816 896 1056 600 601 604 625 +hsync +vsync
# 85 Hz Resolutions
# X_MODE_0 = 800x600 60.75 800 864 928 1088 600 616 621 657 -hsync -vsync