Windows 7: Nvidia video card crashes in 3D - error report and files attached.

I recently received a refurbished HP Compaq 8710w laptop with the following specs:

• Intel Core 2 Duo T7300 @ 2.00GHz, 4MB L2 cache
• 8 GB (2x4GB) DDR2-800 @ 667MHz
• Nvidia Quadro FX 1600M 512MB GDDR3 @ 625/1250/1600 (core/shader/effective memory)
• 250GB 5400 RPM Seagate Momentus 5400.4
• 17'' WSXGA+ 1680x1050 screen
• Windows 7 Home Premium x64 w/SP1

Upon receiving it, I disassembled it, cleaned out the dust, repasted the CPU and GPU, and did a clean install of Windows 7.

Everything is functioning properly now except for 3D applications. So far, I have tried to run Furmark and a couple of DirectX games, but the computer will artifact and then hang up after a few minutes and either give me a black screen or crash to desktop. Then, I'll see a notification that the OpenGL or graphics driver has crashed and recovered itself along this "video hardware error":


These are the "files that help describe the problem" for anyone who's nice enough to take a look at them:
WERInternalMetadata.xml
sysdata.xml
WD-20120725-0008.dmp

So far, I've already tried the following:

1. Disabled GPU Timeout Detection and Recovery (TDR) in the Windows Registry. Didn't make the crashes go away.
2. Tried 4 different Nvidia Forceware drivers from most recent to a 2009 release on HP's website for this laptop. Even installed a driver with modified INF to detect GPU as a Gefore 8700M GT. Nothing worked.
3. Checked the system memory with MemTest86+. 0 errors.
4. Checked the physical seating of the fan and heatsink assembly after the repaste. Everything is right where it should be.
5. Temperatures are absolutely given that laptop was just cleaned out and repasted. Idle CPU/GPU @ 50C/50C, load CPU/GPU @ 60C/70C before crash.
6. Nothing is overclocked or physically modified.

The weird thing is that these crashes only happen when my laptop is plugged in to the ac adapter with or without the battery installed. I don't get this problem if I'm running on battery power alone. However, my graphics card is unable to run any higher than the 2D clocks (275/550/600) on battery due to the VBIOS configuration, so I can't test what 3D clocks (625/1250/1600) would do on battery. The fact that this only happens when plugged in and running 3D applications makes me wonder if the power supply is crapping out and not supplying enough power to the graphics card or something. But I don't want to spend as much as what the laptop cost to get another one only to find out that it's not the issue.