For a three-act plot analysis, put on your screenwriter’s hat. Moviemakers know the formula well: at the end of Act One, the main character is drawn in completely to a conflict. During Act Two, she is farthest away from her goals. At the end of Act Three, the story is resolved.
Act I
If the Hero's Journey follows classic plot analysis, then the cosmogonic cycle follows the three-act structure. So we're going to give this section over to it.
The first part of it – or the first Act – is the waking cycle. This is the time when we're aware and our thoughts are given concrete form. It's kinda like the normal world in the Hero's Journey – the place that the hero leaves in order to go on his or her adventure – except it's much more intimate.
According to Campbell:
The first plane is that of waking experience: cognitive of the hard, gross, facts of an outer universe, illuminated by the light of the sun, and common to all. (246.3)
It's not an especially interesting place, in and of itself, but it's where we can try to make sense of the stuff we see in the other parts. We all have to start somewhere, and "fully awake" is a pretty good spot to do it in.
Act II
Now we go down the the rabbit hole, into the world of dreams.
This is where the conscious mind shuts down for a while, and the subconscious gets to come out and play. Campbell loves him some Sigmund Freud, so it's no wonder this is the part where all of the interesting stuff happens.
The second plane is that of dream experience: cognitive of the fluid, subtle, forms of a private interior world, self-luminous and of one substance with the dreamer. (246.3)
Dreams are where creativity and imagination come from. They're places where our hopes and fears and desires take on a form that we can understand. Granted, it might be weird – that three-headed rhino-chicken with the head of your Uncle Milton is definitely not something from a normal part of your mind – but at least it appears in a way you can understand and articulate.
Artists and writers have used the weirdness of dreams to create some entertaining stories. Mary Shelley, for instance, first conceived of Frankenstein's monster in a sort of "waking dream," while author Stephen King admits that many of his books are inspired by his own worst fears. (Source)
Heroes come from there too, whenever we need someone to comfort us when things look rough. (Can't tell us this guy isn't a little bit out of a dream.)
It all takes place here, in the realm of dreams. Better fasten your seatbelt; the ride gets a little bumpy.
Act III
Below the dream level is the third and final level: deep sleep. This is the part that we have no memory of, and have not yet fully understood: the place where we lose all sense of self and merge back with the cosmos.
Or, to put it Campbell's way:
As in the actual experience of every living being, so in the grandiose figure of the living cosmos: in the abyss of sleep the energies are refreshed, in the work of the day they are exhausted; the life of the universe runs down and must be renewed. (247.1)
That helps explain why deep sleep is peaceful: we're back in the womb of everything, remembering how serene and peaceful it is. After a few hours there, our mojo is recharged and we can deal with whatever the world's gonna throw at us next. So we move from deep sleep up through dream, into awakening, only to head back to dream and deep sleep every night for a recharge.
Kind of profound, isn't it?