And what happens if he puts one of the dyes into the 2x2 grid?

Nothing seems to happen.

Sure.

What if he tries to scoop up a handful of dirt off the ground?

The crunching sensation lasts for a second, this time, and he can see small cracks appear in the grass. His hand is never actually making contact with the ground, it's just breaking it from a distance with his strange new senses.

One cube of the grass disappears, and a smaller cube falls and appears in his inventory. This one seems to be solely dirt, with no grass on it at all.

Can he make anything by putting the dirt in the 2x2 grid?

Nope!

What if he tries to set the dirt down on the ground?

It springs back into place, full-sized! It's still missing the grass, though.

...sure.

He picks the dirt back up, grabs a few more pieces of dirt, and then turns back around and keeps walking.

He'll encounter a blocky animal! Perhaps a sheep?

Keep walking.

Actually, can he use his new psychic powers to collect some of the leaves from the trees?

Nope. He can break them, but the leaves don't appear in his inventory.

(Also, more of his surroundings are now visible, including what appears to be an ocean.)

He'll back up far enough that he can get out of the way if the tree falls over, and then break the wood of the tree.

The tree does not fall over! It just stays there, floating in the air!

More dream physics. Great.

Can he turn the wood into any type of dye?

He can turn it into four wooden planks, each of which is the same size as the original piece of wood.

And the planks?

He can turn a plank into a little wooden button. The button does not turn into anything else.

All right.

It occurs to him to try putting two planks into the 2x2 grid.

That makes what appears to be a little plate of wood, like flooring.

He won't actually make it yet; what are his other options? Two planks vertically, two planks at a diagonal, all the possible permutations of three planks - what do those make?

Two planks, one above the other, make four sticks. The others don't make anything.

He'll collect all the rest of the wood from the tree, make the plate and the sticks, and then start trying more permutations of all of his objects, including four planks together.

Four planks make a wooden table with intricate designs on it. None of the other combinations he tries seem to do anything, except for red and yellow dye making orange dye.

He saw some blue and white flowers; can he make blue and white dye, plus the obvious combinations from there?