I have never heard of this. Well, not as a named syndrome. I have heard of blind people hallucinating, though. One of my grandfather's cousins had something like this. He had been blind since he was about five or so, and he would see shapes and mist, and all sorts of things.
I wonder if it's the brain trying process information that's no longer available -- kind of like phantom pain in an amputated limb. That makes some kind of sense to me. I don't know how much medical sense it makes, but it seems to me that might be the case.