Dear Marc,
the Matrix trilogy is, in fact, exactly what I had in mind when I made that comparison. And yes, I suppose I have a somewhat analogical style of thinking---which I often have to reign in, as one tends to see spurious connections; on occasion, I have been so taken in by a (superficially) fitting analogy that I didn't notice where it breaks down. I always feel the danger of succumbing to crankdom in that area: I get so taken in by my own associations that I forget to stop and check them against hard data, or, failing that, the hardest arguments I can find against my own views.
This is why discussion, such as that generated by these contests, is so important to me: here, I get the chance to have other people look at my stuff, and hopefully tell me if I've left all solid ground behind and analogized myself into some fantasy cloud-cuckoo-land.
That said, I am admittedly somewhat fond of the rainbow analogy, I have to admit: it goes to show (well, suggest) that whether the world is just as it is in an objective way, or whether the observer creates what they observe, is not necessarily a cut-and-dried dichotomy, but rather, that the two may complement each other to give rise to observed phenomenology.
This is the sort of thing that I also see at work in your thinking: it's not just the tower of turtles or the chain of monkeys, both have their part to play. A point that one might also make in this regard is how we know of the (current) 'bottom layer' of the tower of turtles only via mediation of the 'top layer'---i.e. ultimately, the entire tower is, of course, presented to us only via our experience within the world, and hence, as much a part of the mind as it can claim to be objective reality.
So again, idealism's insistence that 'all is thought' and materialist reduction to fundamental particles may not be the opposite poles of the spectrum of metaphysical options, but may both be valid views of the world, with different emphasis.
And yes, I do agree---a lot of valuable thought has emerged in the essay discussions, and I would be very interested in seeing how this might have impacted individual views. Perhaps make the next essay question, "what's the most important insight to emerge from FQXi contests"?
Cheers,
Jochen