I have similar experiences.
As I'm falling asleep, I'll find I'm thinking about something....and then it's like my mind slows down and I get stuck on one word of what I was thinking.
So, for example, I'm thinking about my garden. I think: "I wonder if I need to ......" and then the word WATER (the last part of the thought) sticks in my head and it kind of hangs there in slow motion. Then I wake up and think "what was I thinking about WATER for?". This sort of thing will happen several times if I'm laying on my back in bed. Once I realize I'm starting to fall asleep...and i roll to my side.....I'm right out and these hallucinations are gone.
I also hear weird things as I'm falling asleep - if I'm laying on my back in bed. Usually I hear my dogs barking or my husband telling me something. I'll ask my husband "why are the dogs barking?" and he'll say..."they didn't!"
When I went onto my meds this stopped completely. When i had to go off the meds for a week...it came back again.
I also notice that sleep paralysis seems to happen when I'm sleeping on my back.
I hear dogs barking, the ice cream truck, loud music, people talking, cats fighting and people on our porch, lol. I also smell things... I also suffer from migraines though and always just thought that I was more sensitive to sounds and smells than other people because of the migraines. Then I just started to think I was going crazy after walking around looking through all of the windows like a crackhead looking for the lights that went with the sirens.... And my fiance doesn't help when he looks at me like I am insane for thinking I hear the ice cream truck at 11 at night, lol...