Nah you're not crazy; we are all hallucinating in our dreams anyways.

When my layered dreams happen, it does feel like forever. Now that I think about it, I've gone 3 layers deep, with the 3rd layer being lucid. This dream lasted for what seemed a lot longer than my normal lucid dreams. I first dreamt that I fell asleep behind the wheel of a car, then I dreamt that I was drunk in a college dorm and went to sleep, and then I woke up in my 3rd layer lucid. However, I did not return through all layers to awake, I went from 3rd layer to awake.

Whenever I have layered dreams, they are rarely nightmares. However I would say that was the most significant one I've ever had because I would scream out for help inbetween each nightmare, and I knew that each of those dreams I was entering was going to be another nightmare, but when I actually got into the 2nd layer nightmare, I would forget I was dreaming (until I returned back to the first layer).

The emotion and fear definitely carried over to my waking life. How could it not, it was so unbelievably real. The feelings do not last long though, I resume to a safe, secure feeling state quite quickly.