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The first thing I did with lucidity was try to "decode" dreams and I too have come to see them as much more. I don't generally look for hidden messages, but feel that hidden situations/ emotions/ perceptions abound. (not that I rule out hidden messages offhand)
Doesn't "decoding" imply looking for a hidden message?
Yes, I'm saying that thats how I started out, and I now see dreams in a more complex and open way, kind of like, the more attention I paid, the less I felt I knew about them. We're not in opposite positions here.
Here's a little synapse of the experience I'm drawing from. I think it will help explain my take on much of what you bring up in the rest of your post. About 6 months before I joined this site I read Wagonner's book. I had been journaling very consistently for over a year with only a few lucids to show for it. Wagonner has a symbolic kind of approach. At the very least, he counts symbolism as
part of the language of dreams. I read it in sort of an accepting way, simply because I was hearing from someone who had put more work and energy into dreams than I. One of the things he talks about is directly asking DCs what they represent. As I was reading, I started to get lucid very frequently. I started doing what he writes about and asking DCs directly "What do you represent".
About half answered "nothing" at first. This is part of why I came to see them as "growing" from parts of my SC rather than "representing" parts of my DC. Others gave direct answers. Then I had an amazing and very long lucid. At the end, I saw all of the DCs I had met marching into the kitchen of this heavy set mulatto woman, presumably for a meal. At first she was yelling and I started to slink away. She had an extremely powerful presence. I stopped and walked back into the kitchen and asked her "what do you represent?" to which she replied "Oh I can't tell you that. You just relax and be more open with people"
At that point I was already conscious of the fact that I would be a happier person if I was more relaxed and open, but there was something inspiring about the
experience. Upon awakening, I must have looked all energized and different, because my wife immediately noticed. She asked about it. I saw my usual response arise in my mind - something true but vague like "well I just had an amazing dream" - But before it came out I remembered the message and I went on a 20 minute play by play account of exactly what had just happened to me. I tried to live this message throughout the day, and thats what inspired me to join Mortal Mist that night and share the dream in cyberspace - its the first dream in my journal.
Yes interpretation by definition is subjective. But that's side-stepping the issue of whether the meaning is actually in the interpretation itself or in whatever is being interpreted.
This came to mind because in this case - the interpretation was very concrete, appeared in the dream first, and stayed exactly the same upon interpretation - to the point where there wasn't much to even interpret. Even if this DC was a result of my synapses randomly firing - I still gained from the process, and the meaning, however misguided it may have been, had been solidified in the dreaming state.
I was working on this with respect to my waking actions before this, but it was much more fully incorporated into my consciousness afterward, and was thence easier to address. There are infinite ways the same basic material can be incorporated into consciousness. A little tweak, the same factors experienced differently can sometimes unlock things within a person.
I have other examples in which the information was rearranged in more creative ways, almost to the point where it seemed like "new" information, but I selected this example for its straightforwardness.
Say you got a four year old to interpret a dream in which they were being very stubborn and refused to lie down for a nap. Do you think that they are going to gain the insight that the reason they are crabby sometimes is because they are tired? If so, you are saying that their subconscious mind "knows" this, but is keeping the information from their conscious mind for some reason.
I agree that if you subtract the intent towards introspection, this process becomes useless. But to your point, I would think the child would come to this fact whenever they can do so cognitively. If that child is beaten every time they seem tired, then the mind may have a reason to play some games around this issue, I dunno, hyperawareness or tiredness, self denial of tiredness. Maybe they'll develop some kind of "tired" themed dreams.
(thanks for the difficult metaphor BTW

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I think people are avoiding the truth and real meaning if they don't look at their actions when they are conscious, because that is the true expression of their whole self. Even if 99% of the motivation for processes that our conscious mind is not aware of, why would looking at what happens when a lot of your brain is inactive help you figure that out? You can't separate out "this is conscious" from "this is subconscious", in dreams or awake. I think consciousness is a very, very minor part of what our mind is and does. It's like trying to look at your own eye without using a mirror. If you want to figure out what you are feeling, if you are not conscious of it, just look at what you do. You don't have to interpret a bunch of stuff that is probably just random nonsense; it's right there in front of you all the time.
I actually think this is insightful, and I think we can actually miss many important and basic things by looking in obscure places for the meaning that is in our actions constantly every day. I totally agree that it can become a method of avoidance. I think it can even become pathological. I think I even know this from personal experience

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thats why I try to measure the value of any dreamwork I do by the level of impact and follow through i am able to execute in waking life, and I don't think that anything I want to accomplish "depends" on dreamwork. (except of course for things like shooting lightning bolts out of my eyes).
Please keep in mind that as a general rule, we are all working on what we want to work on much more in waking life than in dreams. I just think dreamwork can be a little screwdriver in the tool box.
I do think you sell the SC a bit short. Never mind my dreamwork, have you heard about that of Edison? DesCarte? Wagner? All did almost everything while waking, but all reached for that screwdriver.
My little experiment idea - didn't think it would be anything conclusive, just interesting