I vacillate back and forth between thinking this is Nick's imagination, dreams, drunken stupor (which doesn't sound like good ol' Midwestern Nick), or perhaps even something a bit more controversial. Of course, none of the critics want to touch these three paragraphs. My theory is that Nick Carraway has also been corrupted a bit by entering (and participating) in the activities from The Valley of Ashes, but I would love to hear some different opinions.
I don't think this is imagination. I think these last paragraphs and the entire end of the chapter are an impressionistic rendering of a drunken episode.
The detailed explication provided in the second post seems accurate to me, so I'll just comment on the style choice of this passage.
We may read this section as a reinforcement of the subjective nature of Nick's narration. His point of view is clearly affected by his state of being in this section.
However, we can also read this section as a formal experiment with a slightly different writing style, an experiment in keeping with the literary context of the time where Dos Passos was mixing prose types and Eliot was creating pastiche-oriented poetry.
In the middle of Ch2. Nick confesses,
"I have been drunk just twice in my life and the second time was that afternoon, so everything that happened has a dim hazy cast over it although until after eight o'clock the apartment was full of cheerful sun."
After the drunken party which ends with Mrs.Wilson's nose being broken by Tom, Mr.McKee and Nick leave for their homes a little after ten o'clock in the night. Mr.McKee as Nick has informed us earlier is "a pale feminine man from the flat below." Both Nick and McKee ride down the elevator and Nick accompanies Mckee to his flat and I supposes safely tucks him into his bed. Nick leaves McKee in his bed reading "a great portfolio."
The 'great portfortlio' most probably is a photo or a picture album and the passage,
"Beauty and the Beast...Loneliness...Old Grocery Horse...Brook'n Bridge..."
must refer to the titles of the pictures or the photos in that album.
Finally, Nick goes to the railway station and spends the rest of the night there before he takes the first train in the morning to his house:
"There I was lying half asleep in the cold lower level of the Pennsylvania Station, staring at the morning "Tribune" and waiting for the four o'clock train."