Can ESP and out-of-body phenomena be understood as a form of dreaming or hallucination? Currently reading about psychedelic experiences, and it is noted in Wikipedia that:


  Level 4 psychedelic experience
  
  
    Strong hallucinations, i.e. objects morphing into other objects. Destruction or multiple splittings of the ego. Things start talking to you or you find that you are feeling contradictory things simultaneously. Some loss of reality. Time becomes meaningless. Out-of-body experiences and ESP type phenomena. Blending of the senses. Can be achieved with strong doses of LSD, strong doses of psilocybin mushrooms, strong to heavy doses of peyote, and common to strong doses of ayahuasca.
  


Notice the italicized parts.
My hypothesis is: If someone has an out-of-body experience/ESP experience, then he/she is having strong imaginative visuals about being in a certain environment - particularly, the current environment because that someone has dissociated with reality to some extent 

I don't know much about the biochemistry of anesthetic effects on the brain. However, I suppose that the anesthetics in a surgery environment, for example, can have dissociative effects once administered intravenously. From the reports I've read, during the surgery, the individual can describe the environment perfectly while he/she is "asleep" - or being operated on. 

A person under the influence of psychedelics also dissociates from reality, similarly indeed; the senses blend and the ego disappears, much like in a sleep state. Unlike sleep, anesthetics or psychedelics don't easily bring the person back to reality due to the person being under the influence.

My inference is that these individuals can "wake up" during surgery, for example, in the sense (or lack thereof) that they aren't able to feel pain or some external stimuli. They also can't open their eyes. I suppose that it may have something to do with their brain waves on why they are able to possess the ESP quality, or why they are having an out-of-body experience (which, I hypothesize, entails the person being awake but perceiving nothing).

My conclusion is then that the person is awake, is not perceiving anything, AND (most importantly) is using the brain to visualize the environment - much like we imagine things when we daydream. Perhaps the person is even dreaming! 

So as a corollary I propose the person is dreaming in certain cases where ESP is reported, but under the influence of meditative states and/or drugs (of some kind).

Question

Is the out of body experience or ESP caused by a form of day dreaming, hallucination, or altered state of consciousness?
In some form yes if patient is mesmerized by visual heartbeats, acording to Sciencedaily. Also is connected to someones beliefs. But in my opinion could also be induced by drugs in mices.

So, out of body experience could be umbrella term for more than one phenomenon. Some of them could be caused by hypnotics, some not. I'm not sure if those experiments could negate afterlife, because all of them are conducted while subject is alive. It is not that kind of experimental design.

1) Jane Aspell and Lukas Heydrich. Turning body and self inside out: Visualized heartbeats alter bodily self-consciousness and tactile perception. Psychological Science, 2013

2) University of Manchester. "'Out-of-body' Experiences May Come From Within." ScienceDaily, 24 Aug. 2005. Web. 1 Sep. 2013.

3) Jason J. Braithwaite, Dana Samson, Ian Apperly, Emma Broglia, Johan Hulleman. Cognitive correlates of the spontaneous out-of-body experience (OBE) in the psychologically normal population: Evidence for an increased role of temporal-lobe instability, body-distortion processing, and impairments in own-body transformations. Cortex, 2011;**

4) Disturbances In Brain." ScienceDaily, 6 Mar. 2007. Web. 1 Sep. 2013.

5) http://www.pnas.org/content/110/35/14432