I would chalk this up to another survivor's thoughts being read and the island/Others/Smoke Monster projected the thoughts into Hurley's head.
The mind reading angle just doesn't make sense to me. I haven't seen near enough evidence to conclude anything as I still believe the Ecko/smoke monster images to be his life flashing before his eyes as a way of showing him being in control of his life's short comings and thus exhibiting strength to Smokey. I think Hurley's guilt complex explains Dave and his hoarding of food combined with the constant nagging of the numbers "curse" brought about another episode. The guilt complex induced visions also goes for Jack seeing his dad and Claire seeing the horse (that horse wasn't real, right?).
Evidence, I think there is a ton of evidence.1. The images were inside of the smoke monster, you even saw the electrical static going that was never present in the smoke monster in other scenes. I think that is pretty good proof that there is some sort of mind reading capability.
2. Kate's horse was also evidence. We know from her back story that it was the same horse. Also, Sawyer saw the horse and said so, so it wasn't a figment of Kate's imagination.
3. Jack's dad was also evidence because Jack's dad led him to the water/cave when they needed water the most. It also happened to be where Jack's dad's coffin was.
4. In the Sawyer boar scene, the whispers say "It'll come around", which was only a reference that he would have known. Kate also witnessed what the boar did to Sawyer's knap sack, so it wasn't just imagined by Sawyer or a dream.
I understand where Dave was imagined by Hurley in the first place, but I think this occurrence could have been part of this island manipulation that we have seen multiple times before, rather than just Hurley's psychosis again.