Ran across this clip a year ago on youtube, couldn't find it since then. Suddenly it resurfaces.
So the word is, this is one of those projects that gets lost in development hell, animating Winsor McCay's Little Nemo. A lot of big names came and went with going to make it. Cartoon Brew's got the word on it. Miyazaki, Moebius, Brad Bird, Frank Thomas, George Lucas, lot's of folks considered it. This little clip was made by some dudes who are long time collaborator's of Miyazaki (from before Studio Ghibli existed, and into the recent movies).
Daniel Thomas MacInnes links over to a little more history and the orginal full 3:30 pilot.