Factual error: The aircraft used to fly to Shangri-La is a Bristol Beaufighter, a single seat long range fighter bomber. It was not a transport aircraft and could not carry passengers. Some variants of the Beaufighter were two seaters but none at all could be used as small airliners as they do here. It is not possible to simply reconfigure the aircraft as shown here - the centre of gravity, balance and trim would all be thrown out. The resulting jury-built aircraft would be uncontrollable in flight.
Visible crew/equipment: Crew member's head is visible in the mirror at the back of the room, when Evelyn is playing with a sword. The head in the reflection turns and he smiles, as she jumps off the desk and moves out of frame. (00:16:00)
Revealing mistake: Right before Rick grabs the half of the broken dagger, he is starting to stand up, only to be kicked by the Dragon Emperor and slide back about 8 feet. As he starts to stand again, you can see that the background is exactly the same as the first time he tried to stand up - meaning that both moments were taken from the same shot, despite the fact that the background should now be different.
Other mistake: After the avalanche when the yetis are pulling the people out of the snow the first person they pull out is by a house or shrine, as they pull them out look closely at the wall right behind them--the "snow" flips up like paper.
Plot hole: Zi Juan tells the rest of the group when they are in Shangri La that she will take the first watch at the entrance and guard against the emperor getting in. A few shots later, she then decides to have a conversation with her daughter nowhere near the entrance, and now with no-one guarding, means he gets in unchallenged.
Continuity mistake: When the group enters Shangri La, Alex runs down toward Zi Juan and the fountain. Before he gets there, we get to see wide shots from behind him of the ground to his left which is rocky with no path, and we also see that no-one is following, yet in the next shot from the front, Zi Juan's daughter appears instantly to block her mothers sword swing. There was simply not enough time between shots for her to accomplish this, and even if it were possible, her mother would have seen her approaching.
Other mistake: When Rick and Evy are fighting the clay mummies, Rick yells, "Shut up, clay boy!" before he hits the mummy with a machine gun. In the very next shot, he is holding a pistol - an entirely different gun, as it never shows Rick dropping the machine gun and pulling out a pistol.
Continuity mistake: During the "final confrontation", after Alex wakes up, we see the Dragon Emperor hit Rick with a spinning kick, knocking him to the ground. As Rick falls, in the first shot the Dragon Emperor lands and is facing away from Rick, in the second shot (where we see Rick hit the ground) the Emperor is already turned back to face Rick, and in the third shot, the Emperor turns to face Rick yet again.
Continuity mistake: At the dinner table where Rick and Evy are about to eat fish, after biting into the fish she finds a bullet and pulls it out of her mouth. In the next shot facing Rick, she does the same thing, only differently from the previous shot. (00:14:10)
Revealing mistake: When Mad Dog sees the Dragon Emperor walking through the snow shortly after Rick and Evie leave, we see him rub some fog off of the window he is looking through, and it is very clear that the fog is computer generated. It doesn't disappear "correctly" as he wipes it away.
Other mistake: When the avalanche is over and the Yeti are digging out our heroes, they are conveniently less than four feet from the surface of the snow, despite the fact that millions of tons of snow has just landed on them.
Deliberate mistake: When the Dragon Emperor is giving his Terracotta army the speech near the end, you see a shot that pans across the faces of several of his soldiers. A few shots later, this exact same shot is played in reverse. It is very easy to tell if you look at the way the camera moves up and down to catch the different faces.
Continuity mistake: Alex pours very little water into the Feng Shui compass. However, when he and Professor Wilson are aligning the stone wheel to the compass, the water level in the compass shows a lot more water in it than the small amount Alex poured in.
Revealing mistake: As the emperor raises his army, you see the holes form into the ground and the armies march. After a close up and the camera pans to get a larger view, watch closely and you can see the army take a totally different formation, caused by a computer generator. (01:19:40)
Revealing mistake: Just before the final battle, as the O'Connells are preparing, you see Rick and Evie emerge from behind a rock with guns in hand and cautiously watch over what is happening. In this shot, Evie is holding two pistols, and you can see that one of the pistols (should be on the viewer's right) has a bent barrel, revealing it to be a prop of some sort.