I've had the same problem trying to connect to an Amazon Redshift cluster while using the recommended library, Npgsql.
What worked for me was the removal/commenting of the following line at the file NpgsqlStartupPacket.cs @ 63:
parameters.Add("lc_monetary", "C");
The same lc_monetary setting appears in another file which has a description of it's use: NpgsqlConnector.cs @ 953.
However, this should not be taken as a solution but a workaround since I am yet to determine the impact of this change. But it looks like Redshift doesn't support this feature.