I also have that model of Wells Gardner monitor and am using the Act Labs PC gun.
I've played many lightgun games for both MAME and separate PC games (House of the
Dead 2, etc.) and haven't had any issues. I don't have a separate graphics card, rather it's
onboard the motherboard.
I had a similar problem that you described and the fix for me was to go to Act Labs website
(see link) and send their tech support team a description of the problem. They then sent me
a patch that I tested with the gun and since then (about five months ago), it's been working
great. I can't seem to find the patch though at this time. As you probably know, the gun doesn't
use a driver, firmware, etc. but the patch "flashed" the gun and calibrated it.
http://www.act-labs.com/tech-support.htm