Very cool movie reminiscent of The Outer Limits but far creepier---kind of reminds me of the episodes "The Sixth Finger" where David McCallum evolves into a giant-headed Future Man and "The Mutant" where extra-solar colonist Warren Oates develops eyes like sunny-side-up eggs. Also has similar themes to Inception where a person can live through years in deep dream states.
"In this surreal horror flick, a doctor is perplexed by a patient who's terrified of going to sleep. Each night, the patient's dreams grow longer and more frightening, eventually taking a toll on his body and ravaging his mind. Believing that these long dreams hold the secret to immortality, the doctor experiments in a nightmarish descent into madness."
From uber-creepy manga artist and writer Junji Ito (Kakashi, the 'Tomie' movies and Uzumaki: The Spiral) and directed by Higuchinsky, who also directed Uzumaki.
* Trailer:
http://www.youtube.com/watch?v=zVIz5HwRISw&feature=related
* In Japanese with English and Spanish subtitles. Features behind-the-scenes footage plus Subtitled interviews with Junji Ito, Higuchinsky and cast members.