Similar situations in other California cities:

Battle against unwarranted stop signs in Chico, California
Successful removal of unwarranted signal in San Carlos, California
Traffic Calming Program in Livermore, California (includes comments on "unwarranted stop signs")
Request for removal of unwarranted stop signs in Temecula, CA
Traffic Operations FAQ - Roseville, CA (includes discussion of CalTrans signal warrants)

Similar situations in other states:

Successful removal of unwarranted signals in Savannah, Georgia
Replacement of unwarranted signal with traffic calming devices in Cambridge, Massachusetts
Information on Signals, Signs, and Traffic Studies from Town of Gilbert, Arizona
Traffic control signs, speed limits, traffic signals FAQ from Baton Rouge, Louisiana

Rules, Regulations, Policy, and Law:

Federal Highway Administration (FHWA) Manual on Uniform Traffic Control Devices (MUTCD)
CalTrans Safety Manual and MUTCD Supplement
23 U.S.C. (109) (d)
23 U.S.C. (402) (a)
C.F.R. Title 23 655.603
Monterey City Code
California State Vehicle Code
Case law: Rumford v. City of Berkeley, 31 Cal.3d 545, 645 P.2d 124 [1982]
California Streets and Highway Code (scroll down to Division 2.5 (City Streets)
FHWA letter on "basis of installation or removal of traffic signals"  (PDF document)

Insitute of Transporation Engineers (ITE):

ITE home page
Neighborhood Traffic Control Devices (PDF document)
ITE summary on Traffic Signal Warrants (PDF document)
ITE Traffic Calming Manuals
ITE take on 4-way stops (PDF document)

Commentary and Studies:

FHWA comments on red light running (mentions unwarranted signals)
Wade-Trim Traffic Engineering Study (see section on "Signal Warrant Study")
University of Alabama Study on red light running (recommends removing unwarranted street signals).
Study: multi-way stop signs do NOT control speed
Great website on traffic safety:  http://www.scienceservingsociety.com/

Other:

05/13/2002 Monterey Herald article on Traffic Lights
City of Portland Traffic Calming Program
City of Portland Speed Bump Review