C.S.
This is going to sound strange but, honest it worked. Around Halloween, my Daughter started going through this same thing.
I removed her closet doors so that the Monsters couldn't hide in there and then we went to the store. At the time they were selling "Monsters" that played music and danced. I let her pick one out that she liked (It plays the song "I come from the land Down Under" by Men at Work)and bought it. We then played with it as often as she wanted. Once she named it we then placed it under her bed. This is now the ONLY Monster in her room, and he is her friend.
Now when ever she mentions a Monster in her room, I can say..."Don't worry it only Thunder (that is what she named it) and he won't let anyone else move in with him."
It seems to work, also she started watching the Movie "Monsters" by Pixar (I think) and really likes it, she doesn't seem to think Monsters are scary any more.
Like I said, sound strange but it worked.
Good luck.