This is my setup.
I got two main monitors 1680x1050 and besides that I got my 1080p TV connected to the computer so I can watch movies.
I use KDE 3.5 as a desktop environment, kwin-3.5.10, kdelibs-3.5.10-r6
Dist: Gentoo-amd64
Kernel: x64-2.6.30-r4
Geforce 9800X2: nvidia-drivers-1.8.60

When I put a movie/game in full-screen they get the size of 1680x1050 on my TV and you can see the rest of the desktop.

I tested downgrading to kwin-3.5.9-r1 along with kdelibs-3.5.9-r4 and now it's working again.

Unfortunately I do not believe there will be any more bugfix releases of KDE 3.5 at this time, so unless you can find a distribution that still supports KDE 3.5, then it is unlikely you will be able to get this fixed.

I would recommend using the KDE 3.5.9 release at this time as solution.