I see the dualism as an illusion because the transcendent aspects are united with everything because they are each other but the transcendent aspect is the fabric and the building blocks. Still there is no separating it, if you have seen the creation you have seen the creator. To us we see a creation but we have found that their is much more to this "creation", the power is within itself and we have barely scratched the surface of tapping into it.
I've been coming to some new thoughts in regards to differences between theism, pantheism, and panentheism lately and they seem to be running parallel in other similar threads. I'll expand on it a little here.
What you say about the transcendent I think I might rather call the Ground, or what is fundamental, or the building blocks as you put it. Overcoming the illusion of separateness is in its own right a transcendence as it a moving beyond out sole self-identification with our egos. We see we are not outside the system, not isolated from each other and the world trapped inside the mental worlds of our heads, but rather are all part of a holistic, interconnected system.
That transcends the mere egoic-self reality, moving in some measure beyond the separate self, to what is also our prior-self, before the world of dualities in undifferentiated sameness. It regains what was lost, overcoming at least the terror of isolation in the world, which is the common human condition, which condition is reflected in our mythologies of a fall from paradise, our separation from God for some wrong committed in our past, etc. But is it really Transcendence in the sense of the Ultimate, or a step towards the Transcendent, transcending that egoic stage of our awareness beginning with realizing that fabric of reality we are part of is part of us?
In the other similar thread I said that I see the difference between theism and panentheism (I'll get to pantheism in a minute), as conceptual descriptions of one’s experience of the ineffable. To the theist, it is seen and experienced as outside or externally to one’s own internal reality. It is sensed as a duality with them as the observer, experiencing themselves connected to it through faith, or an intuitive sense of connection to it, like a child longing to reunite with its mother. God is "out there", external to ones internal reality, save through symbolic forms.
I'll inject pantheism here (before thoughts on panentheism) likewise is a conceptualized description of the experience of this holarchy beyond the earlier radical duality of an externalized God. Some years ago I described what you were speaking of this fabric or building blocks as a 'seamless cloth', upon which is embroidered various repeating patterns of colors and shapes, all with unique but categorically identifiable forms.
And so we as individuals each live as one of these little island universes looking over to those who look like us and waving to each saying, "Hi! Tell me about yourself," and so forth. And we interact with each other in the shared spaces between us, focused on one another and learning about our own unique patterning by seeing ourselves reflected back by the other little island universe we are talking with. And so we live out our realities like this, unaware that we are all made of that same seamless cloth woven into each of us, that we are all bound together and touching each other through this invisible web that is foundation to the tapestry of the universe of life we a part of.
So then one day, one of the island universes interrupts this self-reflexive game and sees that fabric in himself and all others and screams out to the world of island universes, "We are all ONE!" Of course the others think he's crazy, because they don't see it. They only see the differences as the mountain of self identification they stand upon is one built on differentiation, not unification, that mountain or pile of texts that say this is me and that is you. This is pantheism.
But what is transcendence? What is the theist talking about? They say the world is separated from God, but they are wrong, because God is the seamless cloth that is in all and all in it. It is not transcendent, it is immanent within all that is, and all that is, is it. So the panentheist then seems to be even more confused than the theist, as he on the one hand says all is immanent, all is one, yet on the other says transcendence is not an illusion! It's a contradiction.
I would say that transcendence is not what is fundamental or the building blocks of which all manifest form arises from, but rather is that which all manifest form arises towards, that potentiality within all that is inherent within it which flows down from the Source into creation, and which manifests itself in a series of unfolding through self-transcendence on a path of return to Source as Goal through evolution, always reaching, always transcending itself towards the infinitely receding Transcendent One, assuming higher and higher form. In other words, it is not a return to Ground in a path of dissolution dissolving dualities into a fusion with Source, but rather a path of ascension towards a full realization of the yet-unrealized potentialities inherent within form. The Transcendent is in all form, unrealized, in slumber, not yet unfolded. The realization of Transcendence is not in dissolution of duality into sameness. Rather it is through differentiation into Unity Consciousness that brings together that holarchy and that duality in another layer of self-transcendence, another unfolding, an unpacking of the Divine.
God is not just the Transcendent One; that which all of creation has fallen downward from in a theistic experience. Nor is God just the Immanent One; that which unites all diversity within itself in a pantheistic experience of Oneness. Rather, God is seen, felt, and experienced and describe in panentheism as beyond the apparent world, all manifest form as its highest Goal, it’s potentiality inherent, but yet unrealized in its fullness in all manifestation, as well as fully present as it’s Ground within manifestation. So it holds to the Ground of pantheism, and the Goal of theism. God is the fully Immanent and the fully Transcendent. It speaks from the interior realization of That within oneself which is simultaneously the Source and the Summit, the Ground and the Goal. It is the Transcendent that draws evolution towards Realization, it is the Immanent which anchors it.