Yes, the inhabitants of Flatland, the two-dimensional universe, have discovered relativity. They’ve noticed that mass and accelleration causes a “curvature” of the space-time “sheet”.

They’re wondering whether that curvature is in a literal 3rd spacial dimension, or the “curvature” is merely a state description of the sheet’s properties?

Well, Singledad, I can see I’m going to be a spectator for this one, but while we wait for the knowledgable ones to arrive, I have just this for the Flatlanders:

The “life” that exists in Flatland is entirely metaphorical, of course.

They have noticed the phenomenon that light travels at a constant speed in every reference frame. They have deduced the laws of 2-D electromagnetism (which also predicts the constancy of the speed of light) and realize that relativity keeps those laws consistent in reference frames that are moving with respect to one another.

They have realized that all of the equations “make sense” if they postulate a third spacial dimension that their ordinary three-dimensional space-time (two spacial dimensions and one time dimension) “curves into”.

Being a very simple and straightforward explanation, they wonder: should this “curvature” interpretation be considered literally true?

Why not? Some models of superstring theory operate in 26 dimensions. If 3D’ers can postulate 26 dimensions and consider the existence thereof as real, I doubt that the postulation of one additional dimension to a 2D’er should be much of a stretch.