No, they're confused. The part that goes from ADC to DVI is in the $15-$25 range, and might even come with the computer. It's the other way around (DVI to ADC) that's $100-$150 because it has to include a power supply for the monitor.
Microsoft could help you out. But no doubt they'd rather have you send them another $400 to get Word 2005, which almost-but-not-quite fixes that particular bug and adds 53 more handy-dandy features that nobody will ever use.
Based on what you've said so far, I would suspect a bad drive before the logic board. Go to Best Buy (or some other store without a restocking fee), get a hard drive that is smaller than 128GB, stick it in where your old drive is now, and let us know if it works.