Continuity mistake: In the opening credits, we see a re-cap of the first film. If you pay attention, in most shots Peyton/Darkman's eyes are a dark color. However, in one extreme closeup, we see one of his eyes and it's suddenly bright blue. (From where footage from the first film, featuring a different actor with different colored eyes, was used).
Other mistake: When Durant and his men chase Lauri out on the streets, they are waving around their guns and causing great commotion and panic amongst bystanders. However, in certain wide shots, you can see some of the extras are standing still, and not reacting to the chaos as they were in previous shots.
Revealing mistake: After stealing the battery out of Durant's weapon near the end, as Westlake says "Batteries not included", you can see the actor's undamaged lips under the fake burn prosthetics on his face and mouth. (Look underneath the exposed teeth where his lips supposedly were burned off.).
Revealing mistake: Near the beginning, when Westlake is experimenting and his mask melts, you can clearly see that the mask is not really melting, and is just covered with suds while a "melting" sound effect plays.
Character mistake: The reporter refers to a "box of ashes" being buried in Westlake's grave, whereas in the first film, all that was buried there was "an ear", which was all they could find of his body.