I've been thinking a lot about this thread, because it's a question I circle back to over and over myself. And hey, what better way to solve your own problem than to try to solve it for someone else?
Like someone else mentioned here, some people do realize one day that they have enough savings to live on for a while, and decide to invest it in themselves. The danger is that you'll burn through your money, not accomplish anything, and end up worse off than you started, which, like Seeker5, was something I did as well-- hard lessons in personal discipline learned! But still, it's a valid way to go if you DO have the discipline.
Having someone else who's willing to support you cannot be underestimated, be it spouse, parents, etc. That is truly a gift from the universe and a tremendous gift of love and soul from the person who offers it.
Some people take jobs that allow them to do other things to occupy themselves. I worked in a box office for a while where I wrote a three-act play and several other projects in longhand in between phone calls, because we were encouraged to bring stuff to do to keep from getting bored at those times.
If you can work online, it is very possible to do some kind of work that lets you set your own hours. I have a part-time second job right now that I can do at 3 AM in my pajamas on the couch if I want to (and often do).
As has been widely discussed here, you can choose to live extremely simply so there's less financial pressure, and/or to seek out some kind of government support. My brother-in-law is a dancer who moved to Europe after realizing that he could get government support for his art over there that he could not get in America.
I might have mentioned this in another thread, but a filmmaking book I read recommended appending the phrase "for my film!" to any thought related to one's day job (ex. "I have to go flip burgers-- for my film!") in order to remember what the priorities are if you are doing a job to survive while pursuing your passion. Another of their recommendations was to get a job that offers some kind of benefit towards your real work-- like for example, a filmmaker working in a local access station or a rental house might be able to take out good equipment for free for her own projects.
I don't know if this has made it overseas yet, but there's an informal program called Freecycle here where people basically offer stuff they can't use anymore to others for free, or request things they're looking for. That can help a LOT if you're patient! When our household TV broke, I put out an intention to get a new one, and within a couple of weeks an even bigger, perfectly functional set came up on Freecycle and I was able to claim it. Often you can even get groceries on there!
Craigslist also has a "free stuff" section, as well as a "barter" section.
You can sign on with a temp agency or scour the ads for one-time gigs that you take only when you really need to make a little cash. I made a couple hundred dollars one day standing in a horror convention in a gothy corset, handing out flyers. Not a bad deal at all, plus I got to go to the convention for free! For a writer this can be quite useful, too, because the variety of interesting experiences is great fodder for stories.
Joseph Campbell spent a few years where he did nothing but read all the classics, just because he thought it was a worthwhile pursuit (having not yet become the famed Joseph Campbell of the Hero's Journey); he lived in someone's cabin, if I remember correctly, and his friends willingly had him to dinner because he was such great company.
You can get REAL good at scavenging food when hunger is the alternative.
My housemate and I once figured out that if you went to the right supermarket, you could make a round of all the free sample stations and have a decent meal. Friends who frequent restaurants might be enticed to take their leftovers home for you. Parents will almost always feed you or give you a care package (my mom still tries to give me food even though I haven't been a starving artist in years!) Gallery openings are great for free wine and occasionally a snack.
I think ultimately every situation is unique, though. It seems to me that it comes down to 1) choosing what *really* matters in your lifestyle, realizing that everything you keep is something you have to pay for in some way; 2) looking at your available resources; 3) applying some creativity to your planning; 4) getting the people you live with/who depend on you on your side and cheerleading your work, if at all possible. And I think the point is not so much refusing to do *any* work besides your Big Work, but rather quitting jobs that demand priority *over* the Big Work, and only taking jobs that make the Big Work possible in some way. I mean, if you CAN write your first novel at work, do you really need to quit that job so you can write at home and stress about money on top of it?
It seems like pride is a big obstacle to overcome with this limbo. We get so used to measuring our worth in dollar signs that it feels humiliating to sell possessions or to say "no" to restaurant dates we can't afford anymore or to accept a friend's hand-me-downs. I will say that in my experience, the joy of doing what you love really does compensate for a lot of that stuff. It can be hard not to succumb to feelings of shame, but on the other hand, it can feel pretty wonderfully creative and bohemian to discover new ways to be resourceful and make do with less.