It's the cable that tells the GPU what resolution to set on a T40. So, if you are using the SXGA+ cable with the Quanta panel and still getting resolution/display issues, it must mean that the panels connector is not exactly compatible with the T40 cable.
I've seen similar issues with mismatched LCD/cable combinations, but always with both ThinkPad cables and panels.
The panel itself is capable of 1400x1050 and shows up as that in the list of displays, but Windows does not offer that resolution.
I'm not sure what you are saying here, but it may be true that "Windows" (the generic Windows graphics driver) doesn't support 1400x1050, if you have the right ATI driver installed it will.
Best bet would be to get a working T4x SXGA+ complete lid, and just bolt it onto the T40.