It's exactly that!! Whenever I try saving on that quest it freezes! It's been fine so far with dragonborn, but I'm currently trying to get all the deadra artic facts and this is the first time I've started the quest so is this quest the problem?
Yes, the "Waking Nightmare" has a serious bug introduced in patch 1.8., which it sounds like you are experiencing. However, there is a way around this. You will need your most current (and working) savegame, which I guess will be somewhere within the 'waking nightmare' quest. You will be able to save anywhere up to the point of drinking the potion ("Tourper", or however it is spelt). Anyway;
1) Save the game before drinking the potion. This will be the last time you can save the game until the end of the quest.
2) Turn off all autosaves.
3) You may want to lower the difficulty setting to reduce the chance of get killed, otherwise you will lose quite a lot of progress.
4) Drink the potion. Continue playing as normal, but
do not save.5) When you complete the quest, collect everything you need (including the staff), because you will not be able to return inside to the tower once you leave.
6) Leave the tower.
7) When you exit the tower through the main doors, save the game. It should now be safe to do so.
8) Reload the new savegame (this step may or may not be necessary, but the idea of this is to clear any garbage that is lurking around in memory that could be causing the quest to freeze).
8) Turn on any autosaves that you used to have. Restore your difficulty to your original setting if you had changed it.
9) Do not
ever go back in the tower. Otherwise, the glitch is likely to return.
Hopefully, this will allow you to complete the quest.