Difficulty breathing when lying in bed? What might be the cause?

Heart or lung diseas. CHF is a known cause for this, but also other conditions that cause swelling and fluid retention would cause water to go from legs to chest when a person lies flat. Also lung diseases varying from mild asthma to severe emphysema could cause this. Severe obesity would do it too since it restricts lungs inflation.
Congestive Heart Fai. This is called orthopnea and is most commonly seen with congestive heart failure. Medical advise should be sought and a thorough work up is recomended to diagnose underlying condition.