The most important changes for the monk in 1.0.4 are aimed at improving damage-focused Spirit Spenders. We're happy with where Spirit Generators are right now, but unfortunately once you have Spirit, there aren’t very many appealing ways to use it. In many cases, the most effective use of Spirit has been to recast a Mantra repeatedly for the three-second bonus. While this is certainly one possibility, it doesn't seem as exciting as using one of the more offensively-focused Spirit Spenders (or at least having that option available).

Spirit Spenders
Exploding Palm:
From a strict usability standpoint, we think the visuals for Exploding Palm can be a little difficult to interpret. It's hard to tell who's affected by the Bleed and who's being damaged by the resulting explosion. Our Visual Effects team has made some improvements in 1.0.4 which will make it easier for players to tell who's bleeding and who's getting damaged.
From a mechanics standpoint, the three-second Bleed can make the explosion hard to pull off, and the damage just doesn't seem enough to be worth the Spirit cost. To help with both of these issues, we’re increasing the duration of the Bleed to nine seconds as well as its damage per second, which should make it more likely that monsters you’ve touched with Exploding Palm will go boom when they die.

Current: 220% weapon damage over 3 seconds
1.0.4: 745% weapon damage over 9 seconds

(Don't worry, Impending Doom is also having its duration increased to 15 seconds.)
Seven-Sided Strike:
The original intent for Seven-Sided Strike was for it to be a solid damage dealer that you could use for a quick burst. Where Serenity granted you an amazing period of invulnerability, and your other combat skills could put out some damage, Seven-Sided Strike would ideally exist somewhere in the middle by offering some invulnerability and some damage. Unfortunately, the way it currently plays out, Seven-Sided Strike feels more like a bad version of Serenity, and the damage just doesn’t seem worth it. To address this, we’ll be doing a straight damage increase to Seven-Sided Strike to make it an attractive option for those who are looking for a skill that really packs a punch.
The damage buff to Seven Sided Strike is significant. And although players rarely complain when a skill gets buffed, it does leave one wondering why a lower damage existed in the first place.
The answer is: our initial design was flawed in several ways. To get the skill where it needed to be, we identified three distinct problems that were plaguing not only Seven-Sided Strike, but other class skills as well, and each problem merited a damage increase.
First, we're upping the damage of many skills with longer cooldowns in 1.0.4. Across all classes, if I can only hit a button once every so often, it needs to dole out some significant damage to justify the spot on my bar. While some skills, like Archon and Wrath of the Berserker, are significant enough to make the cut, there are a lot of skills that need DPS improvements to make their cooldowns worthwhile. Indeed, many monks use Seven-Sided Strike for the brief invulnerability, not the damage.

Second, we're also upping the damage on skills that spend Spirit. As mentioned in the introduction, Spirit Spenders are getting buffed because the Spirit cost needs to be weighed against the benefit of using that Spirit on something else -- such as refreshing your Mantra.

Third, we're taking a hard look at distinctive, class-defining skills that create better tension on your skill bar. We'd like to promote skills that help to fulfill the fantasy of a class; skills that make you feel happy that you chose the class you did. Since the fantasy of a monk involves being fast, agile, and hard to hit, Seven-Sided Strike seemed like a natural candidate.
We looked at making these improvements across all skills and all classes, and Seven-Sided Strike benefitted all three times. As a result, the 1.0.4 version of the skill is incredibly potent (we'll save the details for the patch notes).
Wave of Light:
Wave of Light is the kind of skill that just needs to do way more damage. It has a big Spirit cost, but it doesn’t seem to pay off based on the amount of Spirit invested into it. In general, we’d like Lashing Tail Kick to be a skill that’s good against a small number of targets and feels relatively "spammable," and for Wave of Light to be a skill that’s more of an investment -- something that you don’t use as frequently, but pays out with bigger damage numbers when you actually do hit the button.

Current: 215% weapon damage as Holy + 45% damage as AoE
1.0.4: 390% weapon damage as Holy + 45% damage as AoE

This is just for the base skill. Wall of Light, Explosive Light, and Pillar of the Ancients damage has also been buffed up by a fair amount.

Passives
In terms of passives, it's pretty clear at this point that One With Everything is considered a mandatory passive for all monks. While "mandatory" passives aren't great, making any major change would do more harm than good, particularly when a) incoming damage is so high and b) monks need the extra durability in order to survive. Additionally, as a result of this passive, monks are more heavily tied to their current gear, so making changes to One With Everything would have very noticeable negative repercussions to the gear monks have invested in.
While we'd prefer that there wasn't an "absolutely mandatory" passive, we're going to let this one ride for now. If we do try to make changes we'll ideally do it in a way that doesn't invalidate the passive, doesn't hurt monk survivability, and doesn't undermine the gear people are currently wearing.
Last but not least, we added the ability for monks to wield two-handed weapons in 1.0.3, along with supporting animations. This has allowed some monks who enjoy two-handers to play this way, but it's not always effective. In the Systems Preview, we mentioned that two-handed melee weapons are getting a buff, and that will help. As additional support, the Spirit generation bonus granted by The Guardian's Path is going to be increased from 25% to 35%.