Lyric discussion by mmikkel 

Cover art for Quito lyrics by Mountain Goats, The

For everyone who's ever been in a bad place for a longer period of time, thoughts like these are wonderful fantasies and lies that you tell yourself to keep sane. Sobering up (hence the "glass of water"), making amends, getting your life back on track. And in the context of the album, it seems obvious that these dreams are pretty hopeless and far fetched... it's sad.