It's all part of the story, Gregin simulates your adventure in this sleep that is normal difficulty so you can be ready to beat him for real, which are the hard and epic difficulties.
Are hard and epic difficulties separate storylines, lore-wise? Because I'm pretty sure everyone dies when you beat him in hard difficulty, I think?
The story line is more or less the same, but there are major differences. Eventually you do get to kill Zemn.