Factual error: In the late sixties, when Ron is in the Brooklyn Veterans Hospital, the radio plays "American Pie." This wasn't recorded until 1971.
Factual error: In the opening scene when the kids are playing "War" in the woods, Ron Kovic as a child is carrying a replica of a Beretta M9 handgun. However, Beretta M9's weren't even designed until the 1980s.
Continuity mistake: After Kovic is walking with his crutches, falls and his bone breaks, the crutches keep changing positions between shots.
Answer: He doesn't see anything. He hears his blood dripping back into the makeshift machine the doctors have set up and realizes it isn't working properly. In the previous scene he was told that if they couldn't get the machine to work, he would never walk again.
No, in the previous scene he was told that if they couldn't get the machine to work, he would lose his leg. He was already told he would never walk again.