Yes, you are correct. The verb "imagine" does open up a past subjunctive clause:
"I can imagine [that] there were a policeman there."
Most native English speakers hate the subjunctive so they would try to say this differently: i.e. "Can you imagine a police officer here?" Here are examples of the past subjunctive using the "to be" verb and other verbs as well:
"Imagine that you were on a deserted island and I were with you and I told you not to panic." (All italicized words are in the past subjunctive.)
"Suppose I were dead." (This differs from "I suppose I am dead", which means that I think I am dead. You only use the past subjunctive after verbs like "imagine", "suppose", or even "pretend" when talking about picturing things not real in your mind. "I suppose [or imagine] you're here to arrest me" does not mean to picture it in your mind; it basically means "think" in this situation; however, "I want you to suppose (or imagine) it were true" is completely hypothetical. When using "pretend", you almost always use the indicative either in the past or present: "The children like to pretend they are kings." This exists this way because the children actually play the part of being kings, whereas "Pretend that I were king" means the equivalent of "Suppose (or Imagine) I were king. I am asking you to imagine this in your mind, rather than play the part in make-believe.)
"I would be so embarrassed if he said that to me."
"John talks (or talked) as if he spoke fluent English."
"Don't treat me as though I were a child."
"He wishes (or wished) that he were better at English."
"He imagined that he were living on the moon." (When using "imagine" in the past tense, always use the past subjunctive in the "that-clause" afterwards for contrary-to-fact situations; thus, "He imagines that he were living on the moon" and "He imagined that he were living on the moon" are correct no matter what the tense may be.)
The past subjunctive is identical to the past indicative in every verb in Modern English except "to be", in which case it is always "were" when it is in the past subjunctive. This differs, though, when one uses the archaic second-person singular form "thou" in conjugations, which is still used poetically, in the Bible, and seen throughout old literature like Shakespeare. However, many of the forms in literature using "thou" aren't totally correct because "thou" was used before the rules of English grammar were formulated. Despite this, we can look at the paradigm from Old and Middle English to see what the prescriptive form would be versus what may be seen in written archaic literature. It must be remembered that the subjunctive was becoming moribund in Early Modern English when this literature was being written.
"Thou spokest too soon." (past indicative)
"If thou spoke up, they would listen." (past subjunctive)
"Thou hadst time yesterday." (past indicative)
"If thou had time, they would come by." (past subjunctive)
Again, this rule above is not always followed using "thou" and it is seldom followed when using modals in the subjunctive such as "thou wouldst" or "thou shalt". In this sense, it will be written with an -st inflectional affix whether it be subjunctive or not. In the end, "thou" isn't something one has to worry about since it is archaic and only comes up in biblical, religious, poetic, or archaic literature.
