I would be very grateful if someone please could help me translating and possibly correcting the following sentence: "Is fis an saoil, na múscailte mé as an fis." I think it should be "Life is a dream, don't wake me from the dream", but I'm really not sure.

You've translated it right, the word for dream being "fís", although it can also be translated as "a vision".The irish grammar is a bit iffy though, but I'm just nit-picking.......

In case you're planning something REALLY permanent with it, like a tattoo, here's some more nitpicking:

Is fís (taibhreamh, brionglóid) an saol. Ná múscail as an bhfís (as an taibhreamh, as an mbrionglóid) mé.

I'd say "is brionglóid é an saol...", but that extra "é" is just dialect variation.