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we had a Christopher Nolan movie recently (recent, as in last ten years), which portrayed the various 'dream levels'.  As you go deeper down the levels, one can start losing sight of one's 'true identity'.  Things get muddled, and symbols take on lives of their own.

It strikes me that we have the 'fundamental Illusion' of the densities, with the time/space and space/time splits.  And yet, through consciousness and choosing, we can create our own layers of Illusion, being co-creators and all (the use of will and the personality, etc).  Co-creators different from the sense of blue-ray true Co-creation.

So it seems like we can get truly lost in deeper layers of self-created illusion.  Think of playing a computer game; and then there are mini-games in that game, and there's an internal worldgame currency etc.  This currency sometimes overlaps into realworld currency, like how Diablo 3 originally had  a realworld money Auction House.

One technique for breaking out of various layers of the Illusion seems to be a gentle ongoing reminder of 'I Am'.  But 'I Am' what exactly?  I Am That, perhaps?  

So I think I can understand how such a simple approach can yield fruit.  It basically acts as a counter to the multiple layers of the Illusion, and goes to the heart of beingness.  Straight back up to the top, to the one singular truth.  That the Creator just is.  Just is 'I am'.
I've noticed profound difference in my own life as a result of dwelling on the "I am" focus.  For a long stretch of time I was going on long solitary hikes through the forest doing a sort of walking meditation where I would center my attention on the focus of "I am".  In the book "I Am That", Niz talks about how "I am" is the polishing cloth for the mirror that is our minds, and that with enough polish the mirror would then give a true and undistorted reflection of our beingness in the world of form.  Ultimately, we can only see or "witness" the reflection of who we are.  This is the seemingly outer reality we see around us (or the "that" component in Niz speak).  The reflection is the outer world (matter), the reflector is the inner world (mind), and that which is looking into the mirror is spirit, or raw Beingness.  You can also look at matter as being resonant with the southern pole of the chakra system, and mind being resonant with the north pole of the chakra system, and spirit is the relationship, or unifier, between the two magnetic poles.

Also, I want say that there are many layers of "outer reflection".  If you were discarnate, your "outer" reflection would be "inner" from our material perspective.  But nevertheless, the reality, astral or otherwise, that you found yourself in, would reflect your consciousness all the same, albeit more quickly being a higher vibrational reality.  Sometimes rather than "mind" and "matter", I will substitute the terms "subject" and "object" since the "matter" of the inner worlds is not exactly concomitant with what we physically perceive as matter.  Nevertheless, the same analysis applies.

All the spiritual teachers nowadays that speak of "staying present" are really saying the same things that masters have been proclaiming for millennia.  Even new age concepts such as "you create your own reality" are saying the same thing in a different way.  The reality that we see is simply a reflection of what we are, in this present moment.  If one's thoughts are distorted, ones experienced reality will be distorted.  And the same goes for clarity.  And therein lies the value of the polishing effect achieved by centering your awareness on the formless awareness that you exist, that you are, "I am".  When the mirror is clean, a true reflection of the creator will be seen, and the sacramental aspect of all things will become readily apparent.  

In my walking meditations, where I would silence thought, and simply pay attention to what I was presently experiencing regardless of what it was (some teachers call it "ATA" or attending to the actual), I began to notice over a matter of weeks a lightening of my consciousness.  I didn't feel as much fear, as much anxiety, and became a much more astute observer of what was happening around me.  I felt a deepening of my sense of identity, or rather, a "broadening".  Perhaps it will sound corny, but sometimes I feel like I'm one with the forest around me, like we are both manifestations of each other.  Now, I'm by no means enlightened, but I feel far more at peace (most of the time).  I realize that our true nature is one of peace, and that "mental activity" for the most part is simply inner turbulence, which we have to learned to collect in memory and then identify with.  Even pridefully so.

For the most part, we tend to imagine higher density beings as being more intelligent than us, in the sense of being "better thinkers" than us.  And perhaps they are, but more and more I realize that the intelligence valued by higher spiritual beings is not the sort of intellectual thought that we spend most of our lives doing, but rather, the sort of spontaneous interrelated intelligence that proceeds forth from unity, when thought is stilled.  Intellect, divorced from intuition and the eternal present, is a recipe for insanity I now realize.  The mind is a tool that is valuable for categorizing and subdividing, and appreciating things in their separation, because it allows for different possibilities of creativity, which is desirable, but it is also well to understand that there are times for putting down that tool, and surrendering to the restful silence within.

We are awareness.  I am.  We are.  It is the root of all being, and existence itself.  From my perspective the 8th density is Beingness itself, and 7th density is that same Beingness focused as the universal witness.  Or Logos.  We might even say "8th density" is "Am" and 7th density is "I am".  One involves awareness of self, the other does not.    
I understand what you are saying plenum, you make a lot of good points. From my personal experience with dreaming i can give a quick sum up of the level of illusions i have experienced. The first level being waking consciousness, the next being dreaming consciousness, then lucid dreaming, which is making the unconscious conscious. The lucid experience is the most interesting i have had. I correspond it directly to the astral plane, the active imagination of Jung or simply an awakened state of awareness. The lucid dreaming experience starts off fairly directly as an holographic dream like copy of the physical reality but as one begins to explore this world of the lucid dreaming, moving away from conscious memory, the reality of the dream seems to create itself as i go on. Different symbols appear and disappear based upon the conscious/unconscious desires of the self with an overtone of archetypal symbolism. The most profound experience i had from lucid dreaming was receiving a direct teaching from what i can only consider to be the archetype of the hermit or the wise one, who allowed me to merge with his consciousness and see the dream world environment in unity with himself and myself.

One other experience i have had is that often once a lucid dream ends, the dream will come to close, dissolving into nothingness into limitless space, in this state of awareness i have seen many strange symbols and once ancient languages. Perhaps this experience would be more along the lines of the mental plane and the lucid the astral plane, based on the standard occult jargon. However that being said, i believe the most important experience we have to develop within 3rd density is compassion or to become the love in the moment, until such a time that the vibrational state of 3rd density is no longer needed and we as a group together on earth move onto another level of learning. I would agree that the teachings of the co-creator seems to be that of 5th density, it is not truly the work of an individual incarnated in 3rd density but that need not limit us only to the teaching/learnings of this reality, if we are able to work with more energetic catalyst then surely the time is upon us for the great work.