You don't say what your field is. I think you would get a better answer if you did, as cultural norms differ. My answer is from the perspective of a pure mathematician.
The first thing I want to say is that, given absolutely no specific technical information about your situation, your post gives me the impression that your work is most likely not correct. Or to be more precise: it is an empirical fact that most papers which claim to completely revolutionize a field turn out to be incorrect, so from a probabilistic perspective anyone who says that is most likely not to be correct -- and this by the way is an attitude that you need to be aware of and take into account. What I really mean is that the way you describe your work makes me think it is more likely to be incorrect than if you had just said "I believe I have done work of the highest level of importance in my field, but I have not been able to publish it. What should I do?"
But rather than picking apart your post to reveal why I got that impression, let me concentrate on directly answering your questions.
And is rejecting a paper because it is too good even a valid reason?
Obviously not. Not only is this an invalid reason, it is a reason that does not make any sense and thus is never given. And it was not given to you. If you really think your paper might have been rejected because it was too good, you need to have a long talk with your mentors about how academia works.
So what should I do now?
My advice you to you is to talk to your advisor once more to make sure you've correctly understood what he told you to do. If you have, then I'm sorry to say that I think you may need to find a new advisor -- or at least a new mentor to help you out here. The advice as reported sounds terrible.
I must add here, as my advisor congratulated me and hugged me on this great discovery, he was skeptical of my paper being published because it is simply too outstanding to be true.
Please remember to choose your language carefully in academic discussions. Did your advisor really say "it is simply too outstanding to be true"? If so, he is saying that he does not believe your work is correct, and somehow that most important message has been lost. You are acting as if he said "it is simply too outstanding to be published in a top journal", which doesn't make sense.
And big journals who receive thousands of paper each day will most likely reject it in quickness, and this paper needs to be read with a lot of thought and concentration to be believed.
It would be very helpful to know what your field is here. In my field (mathematics) there are no journals which receive thousands of papers a day. Moreover most papers which are submitted to top journals are read with a lot of thought and concentration -- in fact, the very top journal in my field, Annals of Mathematics, is a bit notorious for keeping (correct!) papers for more than a year before rejecting them after a careful evaluation.
Of course if your paper does something revolutionary and the arguments are difficult and technical, the burden is on you to present them as clearly as you possibly can, and also to make sure that your paper does not have any superficial flaws that would invite an early rejection. The question which has been suggested as a duplicate of this one has many good answers giving advice about this issue. Let me add that it sounds like it has arisen for you:
As I contacted the reviewer, I was told that he and others "rejected it by simply reading the title".
(Again, please choose language carefully: do you really mean the "reviewer" or the "editor"?) Rejecting a paper simply by reading its title would be inappropriate and unprofessional. Even if the title is terrible or worse, one should read at least a little farther to confirm the initial impression. I have to say that I am skeptical that the editor at the top journal in your field told you this. Could you confirm that this is exactly what happened? (FYI, exhibiting a terrible title that you didn't use didn't convince me that your title was adequate.)
He advised that I should submit it to a lesser known journal whose reviewers he is great friends with, so that he'll tell him to take a good thoughtful look at it. He assured me that my paper would be accepted there. However, I might have naively not considered this and simply went for the biggest journal out of extolment.
This sounds like very bad advice. (Again I assume by "reviewers" you mean "editors".) If your advisor really thought your paper was correct and revolutionary, he should be helping you publish it in a top journal, not a journal in which he can arrange to have his influence exerted. It is really inappropriate for him to ensure that your paper will be accepted: again, how does he know it is correct? But I see a germ of something valuable: if he has colleagues or contacts that can give your work the attention it deserves, why don't you ask him to send your paper, as a manuscript, to those people?
In general the way that you try to publish a truly revolutionary paper is not exactly the same as a run-of-the-mill one. Namely, as I said at the beginning, the better a result you claim the more likely it is incorrect (no matter who you are). Everyone knows this. So -- and here I may be talking more specifically about my own field, which has a vibrant preprint culture -- you can make your life a lot easier by circulating your revolutionary paper as a preprint, giving talks / going to conferences / visiting various experts and so forth. If you can't convince any top person in the field that your work is correct, how will you publish it -- and more importantly, so what if you do publish it? Conversely if you can convince several worldwide experts in the area that what you've done is correct, then the path to publication becomes a lot smoother.