Oh boy, folks, looks like Garfield's world has changed forever! He's... sleeping.
The ill-chosen colors of wall and tablecloth today have created the temporary illusion that Odie and Garfield are sleeping on the lawn. They still may be, but "outside" is usually indicated by grass blades and/or a swirly shape representing the sun.
I guess the joke is supposed to be that Garfield fell asleep too close to Odie's butt and got kicked in the face. There's a second level in which Odie's Dream Garfield Avatar inadvertently screws over his real-life counterpart. In Garfield the wish your heart makes is to punt someone in the skull: our great aspiration is to kick a man when he's down. Even the Dream-field in the final two panels indicates with his devilish expression that he knows the seemingly innocuous act of throwing a ball he found, that someone, somewhere, even on another plane of consciousness, is getting screwed over. And it makes him happy.
Title Panel: I'm probably the only person in the world who is concerned that the creepy title panel resembles John Lennon's cartoon contribution to the early queer anthology The Gay Liberation Book. It showed a guy in a turban riding a flying carpet and enthusiastically masturbating.