I didn't necessarily have nightmares, but the dreams sure got interesting. I don't even watch The Walking Dead, and I've had wild zombie dreams. Now I'm just working on how to put some of those images into a coherent plot!

I take topamax (a seizure drug) which from what I understand, mimics what ketosis does. I use it for migraines not seizures. All that said, when I first went on it, I had an huge increase in brain, dream activity. They were also very vivid and maybe a little nightmarish although I didn't wake up scared or anything. I had not experienced this in a LONG time. After awhile though, it all settled down and now I sleep very sound again and usually don't remember dreams much. Turning to paleo, I think my body had already made the adjustment and it went very easy. I know I've been in ketosis, although I think I have enough good carbs that I don't stay there.

My thoughts are that since this is new, and the ketosis is new, that it will pass and you'll start experiencing a better sleep pattern in time, probably soon. Otherwise, listen to your body's signals. Maybe up the carbs in the form of fruit or veggies. Maybe some squash or yams would be starchy enough. Your psychological condition is important in all of this too and if your stressed by the dreams and not getting a good quality sleep, you are not going to benefit from all the good things paleo has to offer.

I stopped having nightmares when I went keto actually, or just low carb. It's when I eat lots of carbs that I get them. So for me it was the opposite. I'd suggest you start using a site like cronometer or fitday to make sure you're not missing essential nutrients on keto.