desktop stretching, not resizing

I am running the latest version 17.1.2 (51548) on a M1 Mac. Guest O/S is Ubuntu 20.04.4 LTS. Parallel tools are installed (supposedly). I've tried reinstalling them multiple times, rebooting, etc. When I stretch the parallels window with the guest O/S, the fonts stretch. This used to not be the case; something seems to have broken recently. Any ideas or suggestions?

I see a lot of errors in the /var/logs/parallels.log file:

04-02 11:38:37.079 I /prlcc:2032:8a1/ Dynamic Resolution: ---->> NEW DYN RES: 2686x1674x0
04-02 11:38:37.079 I /prlcc:2032:8a1/ Dynamic Resolution: new heads config (id=1(1), heads_count=1, ext_width=2686, ext_height=1674, shift=(0,0))
04-02 11:38:37.079 I /prlcc:2032:8a1/ Dynamic Resolution: head 0) width=2686, height=1674, x=0, y=0
04-02 11:38:37.080 F /prlcc:2032:8a1/ Error: Dynamic Resolution: there is no new screen resolution in the driver's list
04-02 11:38:37.080 I /prlcc:2032:8a1/ Dynamic Resolution: RandR set new screen resolution {2680x1674} FAILED
04-02 11:38:37.080 I /prlcc:2032:8a1/ Dynamic Resolution: !!! can not set config, resetting...