Same problem here. Exactly the same as OP described. It has been going on for 
months/years.
Lenovo T420s
Nvidia NVS 4200M graphics card
Ubuntu 16.04.1 LTS
Nvidia binary driver 378.13 from nvidia-378 (open source)

I only notice this when I connect my external monitor to the DislayPort.
Connecting via VGA connector does not give this problem.

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https://bugs.launchpad.net/bugs/1404147

Title:
  Screen is stretched when using dual monitors

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