I agree that more than likely the combination of alcohol and a lengthy DMT session are probably the cause for the "world combination". A single DMT experience, followed by returning to baseline, is obviously different than what you experienced. My guess (and that is all it is) is that you were not anywhere near baseline, but felt down and disoriented but the multiple peaks and valleys of that 90 minutes. Time stretching effects increase with the length of time spent under the influence of DMT.
You are not crazy, but just as with that Terrance McKenna experience you mentioned (I am familiar and have always found that talk particularly interesting), your "two separate worlds" collided in a sense. This left you under the impression of being much closer to baseline than you were and thus were "surprised" by and elf who seemed out of place (being in your reality) but in actuality you were still more in "his" realm than this one.
Yeah in retrospect that'd seem pretty plausible. Back then I would've surely denied this. Keeping an eye at where the discussion was heading though, I'm starting to enjoy my "fuck rational explanations" attitude. I mean seriously, isn't the whole idea of doing dmt to get to a place outside of our neat fucking scientifically explainable world of reason and keep this experience as close to your heart as you can for as long as you can before the world around you rips it from your arms, again with all it's reasoning and scientific explanations?
I feel we are in a pretty tough spot, us educated westerners (those of us who are) striving for more meaning in our lives. We can look at just about any culture around us and each and every one is carrying more appreciation for the inexplicable than we do as a collective. I personally have looked into any religion that came my way and have actively tried partaking in their rituals, joining their communities etc. I've always come out feeling as if I had just missed the real message. Throughout hundreds of hours of talking to deeply religious people (of the major religions, mostly muslims and christians though) about their beliefs, I've kept the realization that I seek DMT for the same reasons that these people seek god. In fact, I seek god in DMT. Call me crazy. I look at god as a simple construct of the human mind, nothing about that can be denied or argued about. We all know the values associated with this construct and we all know it's not a bearded dude sitting on a cloud (which ofc could be argued about by the more simple minded folks).
To come closer to the values this "concept of god" is associated to, to become closer to being a godly individual, I need to hold onto a vision so ephemeral in nature that it needs constant refreshing. Because to do good in this world would be fucking irrational, when you see people being treated like shit every day, when you are yourself being treated like shit, when you come out on the losing end or you see people kill each other over nothing, while a third person is filming the shit to cash in at the end of the day, when you're in a world where he who comes first, is first served. It would be irrational if there wasn't the law on one hand, and whatever real or imaginary reward each of us clinges onto. While I've always been able to be good to others without such reinforcement, I haven't managed to see the justice of it all. DMT supplies just that. The vision of a greater reality in afterlife, which makes being a good boy a whole lot easier. It keeps me from going insane, it's my protection from the harshness of this world. I don't need it often, every couple of years or so is enough. It sure the hell doesn't cure me of seeing the sorrow, but it supplies all the hope I need to find myself smiling when I think of what comes after the shitstorm of my life has come to rest.
Btw I really dig dmt in case I haven't made this clear enough. In fact, I've recommended it to everyone. Parents, teachers, happy people, sad people, crazy people, sane people. I have never seen it do any harm to anyone. It has not thrown any schizophrenics back into an "episode" either. In fact, it seemed to calm their minds unlike any anxiolytic or neuroleptic could, without some sort of viscious rebound effect. Still it's nothing to take lightly and the right surroundings and an inner preparation are crucial for an ideal experience. But I guess I'm amongst people who have all done it, so my praises are not in place. I'd still like to mention that I draw a big fat line between all other psychedelics and this one.