Scenario 1
A boy is in a coma and is being read his favorite fairytale by his mother. The boy is living the story in his head, and sets off on a grand quest to find a spectacular treasure. In the end, he succeeds and wakes up.
I'm a fan of scenario 1 too. I think the "and then he woke up" problem can be avoided if it's known early on that the boy is dreaming. You can also take a different spin on "and then he woke up" by killing the boy in the end. Maybe rather than the treasure being to wake up it's to end his suffering (assuming whatever put him in a coma isn't curable, or waking up would cause untold amounts of pain, etc.), and the mother reading the story is her way of saying goodbye.