The state of believing that your life is at the pinnacle of everything you could possibly want despite the presence of onlookers hating on you.
Could also refer to an action where you are 'living the dream' such as replicating something that you recently saw and admired on an episode of Come Dine With Me. Or the process of doing something that you are so happily immersed in that all the other crap in your life seems to disappear.
'She's living the dream'
'Keep on living the dream'
'Don't disturb him whilst he's living the dream'
'I was living the dream until you rained on my parade'
'Living the dream, flickin' a bean'