before even reading your description I was thinking this was watercolor
I like the over all subject matter. Although kind of strange, it is something that appeals to me as a person.
I especially like the roasting of the birds.
The color and lighting are pretty good too. I would have liked to see some stronger shadows in a couple places like the guy's arm and the bed frame in a couple areas as well.
Although I think you could use some more practice in the medium, I think you have a decent amount of control over it already. You seem to have an excellent grasp of color theory and how to use shades other than gray and black to get a much better sense of shadow. As mentioned there Are a couple of areas I would have liked to see some stronger shadows.
The background, although simple, is good. I really think the watercolor was perfect for this in the simple sense of adding texture and breaking up what would normally be a flat gradient.
This carries the essence of a dream very well. It has that lovely mystical feeling about it that could only come from a dream. A little bit of nonsense and randomness such as the candle lifting the balloon, the fire breathing balloon that looks like a fish and the birds getting roasted by said fire.
Excellent job man. I hope to see more like this in the future.