It's a continuum, as you have said.

When I am 'out there' as I call it, a variety of things seem to happen. Previously I wasn't even aware of it happening, but now am to a greater degree. Which is very weird, knowing that it is happening and yet being unable, or unwilling to try to stop it. It is a defense mechanism, and I still need it obviously.

So.....I at different times.....feel like my body is powering down like an old fashioned tv screen fading to grey, my vision seems to close in at the side and I feel like I am slipping backwards, I drift off into the sky or trees and no longer am present, I hear talking in the far distance(just my T across the room) but can't come back to it, I can feel dizzy & nauseous, my vision feels blurry at the edges........ etc.

So, yes, possibly what you are experiencing could be dissociation to a degree. When your T talks about it as that, or you read about it as a possibility....does it feel right? Not comfortable, but in the "oh that makes sense" sense?