Dreamlike levels in video games

Oh man. I fucking love those levels. Most of the stuff I mention below has a running theme or "reality poorly emulated" but there are some deviations.
My first nomination would be the first final level in Cruelty Squad where the world ends and everyone gets trapped in a giant block pushing puzzle game.
(No good videos unfortunately)

I feel a lot of lo-fi 3D games have this feeling.
In killer7 you awkwardly traverse some barren ps2 domestic enviroments to kill a bunch of transluscent suicide bomber enemies.
In ILLBLEED you run about a bunch of fucked up barren domestic environments and fight bizarre enemies. The central gameplay mechanic revolves around disarming traps hidden in the environment so that they don't kill you.
(If you can't be arsed to play ILLBLEED, I highly suggest you watch the TOYHUNTER chapter on youtube. It probably spoils the craziest part of the game but it might change your mind on the rest of the chapters)

The Shin Megami Tensei games on SNES definately count. Everything is very low detail with blank repeating walls and floors. You can barely make out most people's faces. Every building is turned into some nonsensical maze.

There's also tons of fucking insane DOS shit.
 
Magicant in Earthbound.

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The warp route in Meteo, the second stage of Star Fox 64:

The visuals and the music give this part of the stage a dreamy/trippy vibe. Blew my mind when I got to this area for the first time when I was a kid.
 
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Myst & Riven; to this day I still have dreams that might've been parts of the games. And back when I was playing them, I used to have dreams about puzzles that I was stuck on, or areas I had spent a lot of time in.
 
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The entire Alice: Madness Returns game is dreamlike/nightmarish in my opinion, especially the card castles in the sky and underwater city sections.
 
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Myst & Riven; to this day I still have dreams that might've been parts of the games. And back when I was playing them, I used to have dreams about puzzles that I was stuck on, or areas I had spent a lot of time in.
I swear I've had dreams where I heard music from Myst playing.
 
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Superliminal is, literally, a dream game. The trailer tries to fool you into it being a quippy Portal-like but it's not really even close. The ending's pretty disappointing though.
 
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