The need to choose external video/show all frames is the usual "gotcha" in using a production monitor with FCP. But why ever set it another way? Is there a problem if you set it to show all frames but don't have a monitor connected?
I noticed the other day I was getting drop frames a lot. Everytime I would press the space bar to playback my project it would play 2 or 3 frames then stop then I got the pop up prompt telling me about drop frames. I then turned off my external monitor and everything went back to playing fine again! Weird huh?!