Did Young Goodman Brown dream or actually witness the Black Mass? Does it affect your interpretation?

We cannot know for sure whether Goodman Brown actually saw the Witches' Sabbath or if he dreamed it because there are no absolutely definitive clues that establish the truth one way or the other.  However, it doesn't actually matter whether it was real or a dream.  We do know that Brown left his home, abandoning his wife, Faith, symbolic of Christian faith in general.  On his way into the forest, he thought to himself,

Methought [...] there was trouble in her face, as if a dream had warned her what work is to be done to-night.  But, no, no!  't would kill her to think it.  Well; she's a blessed angel on earth; and after this one night, I'll cling to her skirts and follow her to Heaven.

In other words, then, Brown makes the conscious decision to leave his faith behind, to go into the woods for some admittedly dark purpose that he doesn't even want his wife to know about, for one last night.  He abandons God and all his Christian precepts with the intention of resuming them the next day, but this is not how religious faith works.  One cannot simply pick and choose those moments when one will practice one's faith and then abandon it when it becomes inconvenient.  By abandoning his faith, embodied by his wife, Faith, Brown turns his back on God, so whether he actually sees the Black Mass or merely dreams it, he has already condemned himself.

What final ambiguity surrounds "Young Goodman Brown"?

Hawthorne's use of ambiguity permeates all of his work. Near the end of this story, he says:

Had Goodman Brown fallen asleep in the forest and only dreamed a wild dream of a witch-meeting?

Be it so if you will; but, alas! It was a dream of evil omen for young Goodman Brown. A stern, a sad, a darkly meditative, a distrustful, if not a desperate man did he become from the night of that fearful dream.

The reader is left to wonder whether Goodman Brown's experience in the forest was real or only a dream. Regardless of which it was, however, the effect was the same: he became a man who was suspicious of everybody--his wife, his minister--everyone. He lives the remainder of his life in misery, believing that no one can be trusted because of what he believes he saw in the forest.

Are there ambiguous words or phrases in "Young Goodman Brown" that could lead to alternative interpretations or narratives?

The text of "Young Goodman Brown" is riddled with ambiguity, though this actually serves to enhance rather than detract from the story's impact and effectiveness. Generally speaking, in most of these cases, one of the great strengths of this story, from a literary perspective, is the degree to which a multiplicity of meanings are supported, such that they can even be held simultaneously.

One of the most important examples of this can be found in Brown's wife, Faith, who exists both as a character in her own right and a symbol of faith and salvation. For example, after his first encounter with Goody Cloyse, Brown makes the following statement:

What if a wretched old woman do choose to go to the devil when I thought she was going to heaven: is that any reason why I should quit my dear Faith and go after her?

Notice here the degree to which the wording supports both these meanings at once. Is he speaking about his wife in particular, or is he speaking about the Christian faith altogether? Perhaps most importantly, from a purely symbolic perspective, do they amount to the same thing?

That being said, the most important ambiguity (and the ambiguity around which the entire story turns) emerges with the story's ending, with the uncertainty as to whether Brown's encounter in the forest was even real. Here in particular, there are numerous potential interpretations: his encounter with the devil could have been real, it could have all been a dream, or it could have even been a dream inspired by the devil. Furthermore, even if you hold that this encounter with the devil truly did occur, even then there remains the possibility that the devil was working some kind of deception through magic and illusion. Finally, there remain the questions surroundings Brown's misanthropic reaction to that vision: assuming this encounter either did really happen or, at the very least, was supernaturally inspired, how might these final details relate to the devil's original intentions to begin with?

Did Young Goodman Brown dream the witch's coven or witness it? How does it affect your interpretation of the story?

Hawthorne deliberately leaves this an open question and actually poses the question explicitly as part of his narrative.

The purposeful ambiguity is typical of the literature of the period, in which we do not know how much of the outer world is a projection of our own minds. We don't know if the vision is a dream, a hallucination, or a vision the mysterious stranger (the devil, if, in fact, the devil is an actual being) has produced in order to seduce Brown over to what we now refer to as the Dark Side. Yet the very real aspect of it is the persecution, which the stranger alludes to and which Brown asserts he didn't know about, of the Quaker woman and the Native Americans by Brown's own people. This tells us that at least a part of this picture of negativity among the assumed innocent ones is real. The theme of the story may principally be that of Brown himself taking this fact of guilt too far and attributing absolute wickedness to everyone.

If Hawthorne had had a sense of humor (which he did not, despite his greatness as a writer), we might almost conclude that the quasi-dream vision is a kind of parody of human behavior, like the Yahoos in Swift's Gulliver's Travels are. After his final journey, Gulliver is a misanthrope. This is what Goodman Brown becomes. Whatever the reality or unreality of the witches' coven, the message is that by expecting a perfection that does not exist, Brown is destroying his own life. It's the flip side of Parson Hooper in "The Minister's Black Veil." Both he and Brown cut themselves off from humanity because of their supposed recognition of "evil."