i think it's an interesting theory, would be pretty cool, but the way the game looks it's rather badly implemented. Common in stories is growth and development. Squall makes no growth and development because in the events of disc 1 he's just an a hole who cares more about the job than his friends. And he dies before anything grows. I'd gladly wager everything I own that Square intentions were not to kill Squall off (I bet you would too)
Also when the party plays as Selphie trying to stop the Galbadian missiles, how is Squall dreaming about what his life could have been or something?
But you can make a very compelling argument for Cloud being dead.
He fights Jenova Birth, which can symbolize the birth of of his mission. The starting point. Jenova Life symbolizes the continuity of the mission to kill Sephiroth in spite of Aerith's death. And Jenova Death symbolizes the end. Cloud physically dies at that point. (i'm changing my theory :]). It's a sequence. When he faces Jenova Synthesis, (the combination of birth, life, and death) simply means he's gone through the entire cycle and he has been born, he has been alive, and he has died.
Aerith's ghost at the church is a symbol of Cloud's guilt for not having saved her. And in the dream world he wishes she didn't die, so he creates an Aerith in the church.
Cait Sith predicts that Cloud and Aerith have a great future together. Ironically right before Aerith dies. Clouds future with Aerith is in the lifestream. Aerith and Cloud was the games intended couple. And the unite because Clouds dead.
At the end Cloud et co. face Sephiroth. In the last battle, Cloud defeats the Sephiroth in his consciousness. The Sephiroth symbolizes his greatest obstacle; being able to die peacefully. Cloud has wanted revenge on Sephiroth for seemingly forever, and he has to defeat his demons in order to rest in peace.
Cloud falls in the lifestream and dies after handing the black materia to Sephy because Sephy no longer has any use for him. Falling into the lifestream obviously means he should have drowned.
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Here's why Squall's the only one being interrogated. And this is from the game script too.
Seifer: Even if you don't talk, others will. The instructor, the little
messenger girl, or that Chicken-wuss... He wouldn't last 3 seconds!
Squall: (Th...They're...) ...They're...all here...?
Seifer: Oh, you bet. But since I like you so much, I thought you should
go first. I was hoping you'd be there, Squall. So...how'd I look in my
moment of triumph? My childhood dream, fulfilled.
Lions are a symbol for Squall, I agree with you there. But why would that mean he's dead? Because
it's fantastical and doesn't occur until after he's hit with ice? The moombas are symbols for lions not
symbols of his death. Maybe the world is unrealistic but hardly a reason to believe he died. I personally
believe they are Squalls connection to Laguna, who is his father. (that's why they say "laguna?"
when they see Squall--> they think he's his father).
The author even makes several justifications of how the dream theory is hard to argue or hard to believe
at that point.
As for Ultimecia's quote, my interpretation of it is that, "look back and savour your childhood memories
because time will slowly erase your memories of your past. time doesn't wait or relent. No matter how
hard you hold on. Which plays out pretty well with the ending since Squall is trying to remember but can't.
Ultimecia is probably telling Squall that you can try to get back home by remembering things dear to you
but time won't stop and it'll take a hold of your memories and erase them so you'll never return.
Most of the symbolism in his arguments don't point to the fact Squall actually dies, but more to the fact
that the game is unrealistic. His whole argument hinges on this if it's fantastical then Squall must be dead.
It's pretty loosely connected. For example that hole in Squalls face, he claims is because Squall can't
hold on to his memories anymore. He uses that as an excuse for death rather than what is more commonly
accepted; that memories and the things he cherish are the pathway to getting back to his own time.
Rinoa's feather symbolizes his memories of Rinoa. Squall pictures Rinoa crying and a flood of memories
come at him. Which is how he is saved. As Laguna tells him, the only way to get back is to think about
your friends. I guess it's cause the ending has always made perfect sense to me that I don't really feel
the need for an alternate theory to satisfy me.
My main argument here is not that the theory is not possible, but that the game does not provide enough solid
concrete evidence so that one can say in FF8 Squall dies. Because the evidence provided by the authors
is present in every game.
EDIT: I don't troll. dw =P. i have a tendency to be a bit stubborn in arguments, especially when i sense idiocy on the other side. But that's about as close as I get to trolling.