It begins in Act 2, Part 1 when the illusions of the characters begin to erode. They're coming face to face with truths that their pipe dreams and their alcoholism has prevented them from facing. Not only have they avoided facing truths about their pasts, but also about their dreams of the future. Holding on to pipe dreams is the only way these characters, and by thematic extension, humanity as a whole, can survive. If they didn't have them, they'd be forced to face the truth about themselves, a circumstance that leads to unhappiness. In the case of Hickey, who is also confronted with the truth, it leads to his insanity. All of this refers back to the point first made by Larry in Act 1, Part 1, that the truth is irrelevant. These characters all lead lives of avoidance of the truth, and as such, are able to survive. It is when the characters must confront the differences between their illusions and reality that communication breaks down.