First, study Surrealism, a 20th-century literary and artistic movement.
Works in surrealism in most cases have a very realistic, though extremely irrational style, which helps to eliminate conscious control in order to express the unconscious mind. The images found in surrealist works are confusing and startling, as those of dreams.
This website can help you to understand this style: (click on each artist’s name, and then on his gallery at the left)

Also, one can create a Surrealistic Digital Art; please explore the art of Ben Goossens (among many others)

There can be so many ideas and approaches to create a surrealistic image; you will concentrate only on one: create a masterpiece where a main object is very out of scale (either very big, or very small)

1. Here is the link from which you will find the project description:
Read the whole page about emphasis (to the part "Presentation"). Instructions for the projects are in the part: PROPORTION/EMPHASIS PHOTOMONTAGE (ignore the part about hidden objects)
Click on 3 links at the left of the project description to look at students’ examples (do not click on any more links)

2. Make the pencil sketches with your 3 different ideas (we will analyze them and then choose one to work further)

3. Create the final project of your art piece using all your Photoshop skills and knowledge of the techniques and tricks to make it perfect and on professional level. You will use all Photoshop tools that you know (and do not know, but have to learn)
Important: make sure that an image doesn’t look as cut with scissors from another picture; it should be positioned organically into the surrounding background. Use light and value to create subtleties , applying your knowledge of Chiaroscuro and Sfumato.
Note: For this project you can use the photos/images of your choice, made by you or found. Look for high resolution photos under FREE STUFF (click on the Links button on the keyboard).

Students examples:
example 1
example 2
example 3

To implement an object into the setting realistically and organically (so nobody would see that the object was cut in Photoshop "with scissors") , you have to know and apply such techniques as Chiaroscuro and Sfumato:

An element in art, chiaroscuro (Italian for light/dark) is defined as a bold contrast between light and dark. A certain amount of chiaroscuro is the effect of light modeling in painting, where three-dimensional volume is suggested by highlights and shadow,
The technique requires a skilled knowledge of the perspective, the physical effects of light on surfaces, the shadows. Chiaroscuro defines objects without a contouring line, but only by the contrast between the colors of the object and of the background.
One of the best examples of a chiaroscuro painting is the Virgin of the Rocks
This site will help you to understand better what chiaroscuro is:

Sfumato is a term used by Leonardo da Vinci - a painting technique which refers to the blending of colors or tones, so subtly that there is no perceptible transition. Sfumato is applied to create perceptions of depth, volume and form.
In Italian Sfumato means "blended" with connotations of "smoky" and is derived from the Italian word fumo meaning 'smoke'. Leonardo described Sfumato as 'without lines or borders, in the manner of smoke or beyond the focus plane.
One of the best examples of a Sfumato painting is the Mona Lisa
Another one is Raphael, La Donna Velata. You will not find any sharp line there, only subtle transition of an object to a background