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I was also at my wits end about nightmares and what to do about them. Then my doctor suggested we do some role-play. At first I was skeptical, but then after my son woke me up (in the middle of the night) to tell me "it worked Mommy!" I was hooked.
When the nightmare happened, I went to cuddle him until he fell asleep again. The next morning he was able to tell me about all the monsters in his nightmare, in vivid detail. We spoke about how he felt when he couldn't get away and how scared he was. I asked him to describe the fear using his Legos. He built a high, round wall that seemed to cave in on itself and in the middle was a tiny piece.
Then we spent time speaking about stuff that made him happy and powerful...hugs, playing with friends, his teacher, fun stuff, etc. I put my hand on his back and started to make small circles around his heart. I told him to close his eyes and imagine all the happy stuff and "feel it growing" inside him (while I made bigger circles as I rubbed his back). He really got into it and loved the physical contact that went together with his descriptions.
Then I told him to remember how he feels when he's loved and how big the love is inside his heart the next time he has a nightmare. He must take the fear and make it small - like the Lego piece - and then feel the love growing inside himself, so he can be big and powerful and then turn around and chase his monsters away.
This "chat" took almost 40 minutes but it was worth it. Two nights later when the monsters came back, he knew what to do and did it. He came to wake me up - at about 2am - to tell me how well it worked. He was full of smiles and I could see that he was really proud of himself.
We've used this method in other areas as well and it's worked for Aidan. He feels empowered to deal with his "stuff" and now comes to ask me if we can role play situations.
I hope role play can help you as much as it helped me. Have fun with it too.

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