While this is obviously highly improbable, I actually like the idea more than what actually happens at the end. In fact, I'm going to rewrite the game in my head this way. It adds a good deal more emotion to Laguna's portion of the ending as well. That's saying a lot, since Laguna's conclusion was by far the best part to me.
Alternatively, Rinoa was real, Laguna was the guy holding the camera at the end, etc. I think this sort of works because it explains why it looks like Quistis and Irvine are meeting Edea for the first time in the ending. And in this case the acid trip sequence at the end was just Laguna sort of putting his inner demons to rest and letting go of the Squall character/alter-ego.
You know of all the spinoff games Square had to make, they couldn't do a proper FFVIII remake focusing solely on Laguna, Ward, and Kiros. The fuck is up with that shit.