Here’s a new interpretation of the Squall’s Dead Theory. According to the theory:
At the end of disc one, Squall and Friends face Edea on a parade float in Deling City. After the fight, when Edea seems defeated, she conjures an enormous ice shard and propels it through Squall’s chest. Squall stumbles back and falls off the platform. He sees Rinoa above, reaching to him as he falls. Squall closes his eyes and dies. The entire remaining game time, from the beginning of disc two to the second half of the ending movie, is a dream.
Only here, there’s a twist.
Knowing that SeeD is onto her, Ultimecia carries out her plan of time Compression through Edea during the parade. Time stops. The remaining SeeD and sniper somehow withstood it. They enter the future to fight Ultimecia. Rinoa stayed behind.
Meanwhile, Squall slowly starts to lose consciousness. Time stops, keeping Squall in a half-awake state. His brain conjures images of his fantasies and wish-fulfillment. His memories transcend time, during of which he imagines the rest of the journey. His journey is the game we play.
Sometime around Ultimecia’s defeat in real time, Squall imagines defeating Ultimecia in his dream. Time regains, and Squall begins to lose consciousness. Squall also imagines himself dying. In the dream, or in real life, Rinoa walks up to him, cries for him. In real time, she casts Life on him. Squall was losing consciousness from an attack called “Ice Strike”, which is just a normal limit break attack. Falling in battle only renders you unconscious. Something else has to kill you for it to be death.
Squall is the hero at the end of the game, but under this interpretation, he wasn’t. He didn’t save the day from the sorceress. He’s lauded for his bravery in confronting Edea, but SeeD saved the day. We’ll never know how, and can only assume who (Selphie). Now that’s a spin-off game of Final Fantasy VIII I’d want to play!
The problem might be that while Squall learns to open up while dreaming, he doesn’t learn this in real life. So then, the connection he has with Rinoa wouldn’t quite make sense at the end of this game. But for those who like variations of the Squall’s Dead theory, you all might like this.