I'd be ok with the hour use limit and hour immunity, but then we should perhaps give the ability a duration of a bit less than an hour, too, right?
		
		
	 
We've currently got a duration of Concentration, which I'm quite happy with.
How about these modifications to the 
Mist of Dreams rough draft:
Mist of Dreams (Su): Once per hour, Andromidus can produce a zone of gray mist  that can trap creatures within phantasms of anything that the titan  imagines. This mist emanates from Andromidus up to a maximum radius of  500 feet, and Andromidus can form it  into any shape he desires provided the mist is continuous and remains in  contact with his body. He can reshape the mist as a free action.
Any creature who sees or enters the mist must succeed at a DC 
X  Will save. If they make the save, they see the gray mist as a slight  miasma so thin it only offers concealment to creatures or objects more  than 100 feet away. 
Creatures that successfully save are immune to the effects of the mist for 1 hour.
***
There are several ways to escape the mist of dreams. Firstly, Andromidus  may simply release them. Secondly, the titan must concentrate to  maintain the illusion, so if his concentration is broken the mist will  vanish and free all the trapped creatures. Thirdly, a creature who  realizes they are trapped in an illusion may escape from it by  succeeding on a DC 
X Will save. However, they may only attempt the save once every 
Y minutes or whenever Andromidus replaces a dream-world with a new one. 
Finally, a freedom spell can liberate a creature trapped in the mist.