Thread 1 synchronizes on A
Thread 1 synchronizes on B (while synchronized on A)
Thread 1 decides to wait for a signal from another thread before continuing
Thread 1 calls B.wait() thereby releasing the lock on B, but not A.

Thread 2 needs to lock both A and B (in that sequence)
    to send Thread 1 the signal.
Thread 2 cannot lock A, since Thread 1 still holds the lock on A.
Thread 2 remain blocked indefinately waiting for Thread1
    to release the lock on A

Thread 1 remain blocked indefinately waiting for the signal from
    Thread 2, thereby
    never releasing the lock on A, that must be released to make
    it possible for Thread 2 to send the signal to Thread 1, etc.

//lock implementation with nested monitor lockout problem
public class Lock{
 protected MonitorObject monitorObject = new MonitorObject();
 protected boolean isLocked = false;
 public void lock() throws InterruptedException{
  synchronized(this){
   while(isLocked){
    synchronized(this.monitorObject){
      this.monitorObject.wait();
    }
   }
   isLocked = true;
  }
 }
 public void unlock(){
  synchronized(this){
   this.isLocked = false;
   synchronized(this.monitorObject){
    this.monitorObject.notify();
   }
  }
 }
}

//Fair Lock implementation with nested monitor lockout problem
public class FairLock {
 private boolean      isLocked    = false;
 private Thread      lockingThread = null;
 private List<QueueObject> waitingThreads =
      new ArrayList<QueueObject>();
 public void lock() throws InterruptedException{
  QueueObject queueObject = new QueueObject();
  synchronized(this){
   waitingThreads.add(queueObject);
   while(isLocked || waitingThreads.get(0) != queueObject){
    synchronized(queueObject){
     try{
      queueObject.wait();
     }catch(InterruptedException e){
      waitingThreads.remove(queueObject);
      throw e;
     }
    }
   }
   waitingThreads.remove(queueObject);
   isLocked = true;
   lockingThread = Thread.currentThread();
  }
 }
 public synchronized void unlock(){
  if(this.lockingThread != Thread.currentThread()){
   throw new IllegalMonitorStateException(
    "Calling thread has not locked this lock");
  }
  isLocked   = false;
  lockingThread = null;
  if(waitingThreads.size() > 0){
   QueueObject queueObject = waitingThread.get(0);
   synchronized(queueObject){
    queueObject.notify();
   }
  }
 }
}

In deadlock, two threads are waiting for each other to release locks.
In nested monitor lockout, Thread 1 is holding a lock A, and waits
for a signal from Thread 2. Thread 2 needs the lock A to send the
signal to Thread 1.