What causes the late 2012/late 2013 27″ iMac to be suddenly stuck at 1280×720 resolution?

1280x720 is the only option available
“Default for display” is 720p, and 1280 x 720 is the only “Scaled” resolution available

Many users have asked this question, but nobody seems to know the answer. Mine just did it last week, and I took it to Apple today; diagnostics showed that everything was working correctly.

The following solutions are confirmed to not work:

  • Resetting SMC/PRAM (multiple times)
  • Booting into safe mode
  • Clean install of Mac OS X/macOS
  • Booting into Windows (Boot Camp, presumably) on the Mac
  • Replacing the LCD data cable

Other things I’ve tried:

  • An external 1440p monitor connected to the iMac will work at its native resolution (ruling out GPU issue)

iMac 27" 2009 works at 1440p
Late 2009 iMac 27″ in Target Display Mode works as an external display via Mini DisplayPort cable

  • Using the iMac as a monitor for another Mac via Target Display Mode (TDM) works at the iMac’s native 1440p resolution (ruling out internal LCD/data cable connection issue).

27" iMac running at 1440p via TDM
Late 2012 iMac 27″ connected to mid-2012 Retina MacBook Pro 15″

  • Exporting the EDID using SwitchResX shows that the EDID is not corrupt, and appears identical when exporting from the iMac itself and from another Mac when it is connected in TDM (Pastebin)

  • Setting the resolution to 2560×1440 using SwitchResX will allow the UI to appear as 1440p should, but the rendered resolution is still 720p

One user has fixed it after a PSU and SSD install procedure caused snowy display, by reconnecting the LCD data cable. But this isn’t applicable to those who encountered the issue on the iMac from when it was relatively new, i.e. never pulled apart before (first couple of Apple Discussions links) or if the LCD data cable was replaced entirely (Ask Different link)

Does anyone have any further insight into this problem?