The factor that is being overlooked here is that as written, "Last night I dreamed the strangest dream -- I've never dreamed before..." has just the amount of punch it needs, rules be damned. It sparks the line up in an unexpected and interesting way. Trying to make to grammatically correct by treating the phrase as a subjunctive -- a pluperfect subjunctive, at that -- is a contortion toward artifical normalcy which actually detracts from the liveliness of the original language. That's my two bits' worth.

A