cloud cuckoo land 
noun [mass noun]
A state of absurdly over-optimistic fantasy: anyone who believes that the Bill will be effective is living in cloud cuckoo land...
- There will be no going back to year zero of this process - and anyone who thinks we can go back is living in cloud cuckoo land.
- We have made it clear before that politicians who promise to abolish testing and assessment are living in cloud cuckoo land.
- They are living in cloud cuckoo land if they think they can transform the ugly concrete monstrosity into desirable homes.
Origin
Late 19th century: translation of Greek Nephelokokkugia, the name of the city built by the birds in Aristophanes' comedy Birds, from nephelē 'cloud' + kokkux 'cuckoo'.