No. "It was all the character's dying dream!!!" is even worse than "and it was all just a dream!" as far as clichês go. One of the guy's behind Majora's Mask recently came out as saying that the theory is indeed untrue, and I don't blame him. It's a fantasy game, where things like alternate dimensions that exist inside tree trunks are actually possible, believable things. The game doesn't NEED this idea, it's sinister and weird enough on its own steam without adding the ham-fisted dying dream element.
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