I keep seeing faces when I wake up.

A couple of the drawers on my dresser have a little bit of clothes hanging out of them, and even though I keep moving them around, my mind wont stop seeing the wrinkles and outlines and turning them into faces.

This morning I woke up and the clothes formed 3 faces that were shockingly vivid and human looking. Am I just connecting dots subconsciously or could I be hallucinating?

I do that too, but I never saw it as hallucinating. I often wake up sleep and my brain turns my chair by my bed into someone crouching over my bed. The figure changes and is always menacing. after maybe twenty seconds it turns back into a chair. I think of it as my mind playing tricks on me.

Until you start hearing music that isn't there and seeing ghost cats out of the corners of you eyes.....

Exactly. Thats me

It was probably because I was having vivid dreams and woke up abruptly. When I was younger, I did clearly see a large floating picture frame disappear into the wall just after waking up. I think that's a form of sleep related hallucination most people can experience, I just don't remember what the phenomenon is called.

Earlier this year I did start seeing letters and characters written all over the surface of things, including my own skin. It wasn't vivid, but after I stopped seeing it, I haven't seen it since. It's only because that happened that I made this topic.

I much more prone to magical and delusional thinking than hallucination, but I wonder.

I don't think that was a hallucination at all but merely evidence you have a very creative mind. I don't usually get visual hallucinations, mine are auditory and always out side of my head, not in my mind.