Had good luck on my first question for the eventual ID of The Last Planet / Star Rangers, let's see what happens with this one.
probably pre-1982. This is when I started reading sci-fi and fantasy in earnest. Possibly up to '85.
Starts in modern era. I'm going to say 60s/70s.
Tied with scientific experimental LSD use at a college or university.
User is transported mentally to another world (akin to Donaldson's White Gold Wielder)
Can't remember much about the plot. Rescue someone, save the day. That kind of thing.
Pretty sure there were Dwarves, but can't say if they were "good" or "evil", but I'm leaning towards the latter.
A forest featured heavily in it I believe and I seem to remember the cover being dark (blue?) as if at night and showing a forest scene.
Not a very long book. A Tor or Ballantyne type short novel.
That's all I got. Good luck!