Well, I'm back and I've decided to finally start what Eloth recommended that I do. I've been talking with LA Sentry about creating these dream scenes to replace the old messages that you would receive during the main quest of Morrowind. This is the level that I designed for the first dream. This is the story of the first disturbing dream according to the UESP:
"I had a disturbing dream. I can only recall one part. A tall figure with a golden mask led me among the dead as through a wedding celebration. I heard many voices, but no lips moved. I strained to breathe, but my chest didn't move. The tall figure spoke with each figure as he passed among them, laughing and joking, as if they were alive, but they made no reply. I tried to cry out, but without breath, my tongue fluttered in vain."
So far, this is what I have for the first dream. I hope to add a quest and scripting to it so that it will add immersion and allow the player to experience the dream within the game. The other dreams may be just movies. Any constructive criticism is greatly appreciated before I go about adding scripts and everything else.
Here is the link to the video: http://www.youtube.com/watch?v=6XX-MacySJM