It's happened to me, some periods of time when I couldn't remember whether I had any dreams or not, but they've come back, and are extremely vivid. Probably due to my meds and mental diseases. I take 500mg seroquel and 1mg clonazapam at night. I wake up physically rested, but emotionally and mentally, it feels like I just shut my eyes and blinked. Sucks.
Boozing is supposed to be very effective at disturbing your sleep, and shouldn't mix with benzos.
Sounds like you need something other than xanax if you can't get to sleep. I'd definitely talk to the Doc and demand they fix things asap.