My explanation is: instead of thinking of reality as a 'dream' in the sense of projection from some hidden mind, imagine that it _is_ the mind. If you read the http://www.imperial-library.info/content/morrowind-monomyth, you'll see that mythical universe prior to creation was a little bit restless and disordered- the dreamer's mind couldn't make itself up, and was starting to fragment into ideas that disaggreed. So: the original mind, the dreamer, contained contradictions from the very beginning. Now, imagine that this dreamer is thinking in at least four dimensions, all the time, and can think an unlimited amount of complexity, over an unlimited amount of time. What happens when the thoughts of the mind conflict with each other is that they change or fragment, until, over time, you have an incredibly diverse universe which functions according to its own logic- there _is_ an objective reality, with its own physical laws, but these are by-products of the dreamer's attempt to work itself out.
Hopefully this doesn't make things worse.