While a certain number of my ideas come from dreams, as Kelly discusses in his post--and I dream all the time, awake or asleep, it seems--most of the ideas that I have that come from dreams occur in the gray, almost-to-sleep zone that immediately precedes true sleep. When I am just letting go, and a scattering of images, no longer bound by the rules of thought and logic, hurtle though one neural intersection or another and smash together. The result generally jolts me awake, scrabbling for purchase as I search for pen and paper to jot the ideas down.
I very much subscribe, though, to what Harlan Ellison calls "mishearing", whereby the mind doesn't quite hear what someone else has said and fills in the gap--whether that be through replacingsome of the words, or by missing the context and havingn to fill that in. The other day, my wife mentioned that hospitals were dangerous palces to stay for very long; "you'll get a staff infection", I heard.
My mind immediately started filling in: a patient--Miller, let's say--with a gaping wound, a sort of gravity well that was sucking doctors, nurses, and aides into his raw flesh, and the havoc that they would wreak on his sytem at being stuck in his wound; Conversely, a slow bending of his mind until he simply becomes a staff member at the hospital, fillign out charts, wandering from patient to patient with alternating beatific smiles and looks of sympathetic concern, all the while wondering what happened to that Miller guy in bed 2 of room 524...
She meant, of course, "a staph infection", but lacking the proper context (and I won't go into how much I oughtto be attending what my wife says), I heard, and then interpolated, "a staff infection" as one might get it from staying in a hospital too long.
I know that this technique, if it can be called one, is used by other writers across the speculative fiction genres. Terry Dowling's "Flashmen" was conceived upon mishearing The Verve Pipe's "The Freshmen", for instance, and I know any number of Ellison's works have been driven by mishearing words or phrases. How does mishearing figure into your writing, and how does it compare against dreaming epiphanies (good anthology title, there), or asking the classic "What if...?"