Surely:
I was under the impression ATC informed mas at 240 that last contact was 121
Two different things.
[A] Last contact with crew at 1:21 AM, Malaysia Time.
"Malaysia Airlines has said that ground controllers had their last radio communication with the pilots about 1:30 a.m" - Boston Globe
Confusion over plane?s route frustrates families and search - World - The Boston Globe
[B] Last Radar contact of an unknown aircraft flying in Malaysian airspace allowed to proceed unchallenged around 2:40 AM, Malaysia Time. This is the only reason search shifted to the west of the peninsula.