since I love a good google search:
it's the Huggabunch Movie...
http://imdb.com/title/tt0173915/
"It's a children's movie, and there is a young girl and her doll (who is alive and can speak) gets put in the dryer at the beginning. She then walks through a mirror and enters a land that is bright and colourful and looks like everything is made out of cushions! There are more dolls there, and books and bok worms and a big elephant looking animal. They go on a search to get some peaches from an evil witch and walk side ways along a wall. She then goes back through the mirror to her home, but drops the peaches and scurry's to pick them up before they disappear (which means her Grandma will stay old)."
so your psychosis will end:
http://cgi.ebay.com/Huggabunch-HUGGA-BUNCH-vhs-gennie-james-making-of_W0QQitemZ6457463134QQcategoryZ309QQssPageNameZWDVWQQrdZ1QQcmdZViewItem