Sometimes in trying to decide something I might imagine a more extreme case, and see what it tells me...
If several sessions were run, with leveling up and all as expected, and then you said, "Hey, remember that soothsayer back in the first session? He actually put you all to sleep and everything we've been doing is a dream. You are all first level characters", people would likely be upset.
If they are playing the dream just as they would play anything else, why not give them XP? If you need a narrative explanation to justify it, maybe they gained insight (into the world, into themselves, etc.) that will help them from there forward.
Gnome Boy (a.k.a. "Jon") • DCC play-tester @ DDC 35, Feb 2011. • Beta DL 2111, 7:00 AM PT, 8 June 11.
Playing RPGs since 1977 • Quasi-occasional member of the Legion of 8th-Level Fighters - Holds the power to play gnomes at will!
Pbp Secret of Bone Hill characters:
Flavia, WAR, Beekeeper, L, Str 10, Agi 10, Stm 7, Per 10, Int 12, Lck 7, AC 10 hp 5, staff, jar of honey, 10-ft pole, 1 pc chalk, 50' rope, 2 torches (1 lit)
Hector, DWARF Apothecarist, L, Str 5, Agi 11, Stm 12, Per 10, Int 6, Lck 10, AC 10, hp 11, sword, shield, cudgel, steel vial, chest, flint & steel, empty flask, lg sack
Chendris, WIZ, Alchemist, N, Str 11, Agi 9, Stm 12, Per 15, Int 13, Lck 15, AC 10, hp 3, staff, empty flask, 50' rope, 2 candles, lg sack, oil (1 flsk), 1 torch, snakeskin tome; speaks gnoll
Darrow, CLR, Hunter, N, Str 11, Agi 12, Stm 8, Per 16, Int 7, Lck 12, AC 10 hp 5, short bow, 6 arrow, 10-ft pole, deer pelt, torch (lit)