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Alice-in-Wonderland syndrome is a strange phenomenon most often associated with migraine headaches. The "Alice-in-Wonderland" syndrome involves distortions in body images and shapes. Objects either appear much larger (macropsia) or smaller (micropsia) before, during, or after a headache.
I have also read some years ago of this syndrome also occurring in association with mononucleosis, in fact it was the first symptom. So I suspect it may happen more often than is suspected, probably due to other viral infections. Anything that can cause sufficient irritation or dysfunction of neurons in the brain could conceivably cause strange sensations or distortions such as this. So it is not out of the question that a child with a recent or current viral or perhaps streptococcal infection could have complaints of distorted visual images and be 1) telling the truth, and 2) not emotionally disturbed.
Such phenomenon are usually fleeting in nature, and in my opinion would not really be cause for concern unless persistent, especially vivid or distressing to the child or parents, or associated with other signs of emotional problems or nervous system disease. In that case, discussion with a pediatric neurologist would be in order.