It is easy to understand why Joyce was fascinated and disturbed by that passage near the end of Chapter XIII of Biographia Literaria where Coleridge distinguishes between Fancy and Imagination.
The secondary Imagination . . . dissolves, diffuses, dissipates, in order to recreate; or where this process is rendered impossible, yet still at all events it struggles to idealize and to unify. It is essentially vital, even as all objects (as objects) are essentially fixed and dead.
FANCY, on the contrary, has no other counters to play with, but fixities and definites. The Fancy is indeed no other than a mode of Memory emancipated from the order of time and space; while it is blended with, and modified by that empirical phenomenon of the will, which we express by the word CHOICE. But equally with the ordinary memory the Fancy must receive all its materials ready made from the law of association.8
According to Coleridge, Fancy is the 'DRAPERY' of 'poetic genius' while Imagination is the unifying power which 'forms all into one graceful and intelligent whole'.9 If we apply these terms to Finnegans Wake, it is obvious that the fundamental vision displays Imagination in the Coleridgean sense; but it is also true that the 'DRAPERY' of Fancy found in the work's texture often obscures this Imaginative core. Joyce's continuous elaborations of Work in Progress, his multiplying of analogies, proceeded by a method which was a 'mode of Memory emancipated from the order of time and space'. I do not wish to press this distinction between Fancy and Imagination, nor its application to the Wake, too far; it is enough to indicate why Joyce wondered if 'he himself had imagination'. No one knew better than James Joyce the defects of his final work.