After completing the bandit camp and 1 more area I got my third dream.
Well, my sleep got interrupted and I had a save just before sleeping so I reloaded. Anyway, after reloading I no longer got the dream. I reloaded the game, restarted, tried resting many times, but no longer got the dream (and neither did i get the ability associated with it).

Will I get the dream again sometime or is it irrecoveably gone?

You slept again, right?

After reloading? yes... changed areas... slept twice... no dream...

<font color = lightgreen>You will probably pick up the "lost" ability the next time a dream sequence occurs. If not, I wouldn't worry about it--most of the special abilities aren't worth it. </font>

It doesn't actually count the number of times you rested to give you an ability, you can only earn them after completing certain plot points in the game. Then it will have a random chance of any resting after completing that point that you will get the dream. If you are lucky, you can get like 3 dreams in a row, otherwise, it may take many many days. But yes, you will get it again, and probably soon.
-Brainless One

ok got it now...

btw, are the dreams different for good and evil or is it only the ability that differs?? playing evil first time now and cant remember whether the dreams are same..

The dreams for good and evil are slightly different, as are the powers that you gain.