dreamlike/surreal stuff in a contemporary setting? the crying of lot 49 is probably my favorite book of all time and i also really like calvino, borges, flann obrien and the movie 'waking life'
Try Dahlgren by Delany - basically something really fucking weird has happened to a city in america, so while the rest of the world is carrying on as normal, this one city is basically a post-apocalyptic urban area, permenantly overcast by smoke clouds from a permenant fire that's been burning in one area of the city for months, radio and tv signals don't work in the city and things are weird... there's thugs with weird hologram projectors called "scorpions" who have ended up acting as the city's police... the only still functioning church in the city is a weird unitarian thing that seems to exist to hand out free nude photos of a black rapist called George... the only newspaper in town is a crazy tabloid that puts random dates and days of the week on its pages each day... there's people who insist the streets themselves are moving around and reorganising themselves each night... everyone who stays in the city for any length of time has picked up a length of chain with glass lenses on them and wear them at all times for reasons no one really knows or wants to talk about... and then one night the clouds part, and there's a second moon in the sky that everyone in the city agrees is named "George".
I've been thinking about Dick a lot lately. You might want to check out his later stuff like Radio Free Albemuth, Flow my Tears the Policeman Said and even A Scanner Darkly, which has the best Dick film adaptation because it remains Dick.