Revealing mistake: When Leo is laying his dead kids on the grass, the little girl keeps moving her eyes and breathing.
Continuity mistake: When Teddy's kids are lying dead on the grass, the position of the girl's arms keeps changing between shots.
Other mistake: During the flashback of the soldiers executing the Dachau guards, the soldiers are in a line opposite the guards who are in a line against a fence. The soldiers all start shooting at the same time, but we are shown the guards being mown down by gunfire in succession, like dominoes, rather than simultaneously.
Deliberate mistake: During the interrogation scene, a patient asks for a glass of water. When she receives a the glass of water, she lifts her right hand to her mouth and makes a drinking motion, but is not holding a glass. A moment later she sets down an empty glass with her left hand. When the camera angle changes, the glass has become half full. This implies the patient's mental instability and adds to the surreal feel of the film.
Continuity mistake: While Teddy Daniels is talking to George Noyce in his cell in ward C, each time the camera angle switches George change between scratching his head and no hand at all.
Continuity mistake: When Teddy swims towards the light house and gets out of the sea, his clothes are wet, few seconds later, when he is running up the stairs, his clothes are absolutely dry.
Character mistake: Ben Kingsley is Dr. John Cawley. But he is called Steven when the doctors are grouped together discussing how to handle the patients due to the hurricane, right after the graveyard scene.
Continuity mistake: When Edward is entering the lighthouse, he grabs the doorknob on the left side of the door. Next shot, when we see him entering, the doorknob is on the right side.
Factual error: In the flashback, when Teddy was among the soldiers liberating Dachau, there is a semi-circular sign above the gate that says "Arbeit Macht Frei". Dachau had a sign with those words on it, but its sign was oblong. The sign at Auschwitz was that shape.
Continuity mistake: When Teddy and Chuck are walking through the grave yard they approach a building which they enter to get out of the rain. When they are taking off their rain coats, Teddy throws his, but Chuck's just disappears between shots.
Continuity mistake: The first night Chuck and Teddy sleep in the bunk bed, Chuck's head is totally resting on the pillow in the close-up angle, as opposed to the semi-rigid position from the previous wide angle shot.
Continuity mistake: When Teddy's in the lake holding his dead kids, the amount of floating leaves increases / decreases randomly between shots.
Continuity mistake: Before Teddy finds Chuck dead, Chuck takes his hand to the pocket in his jacket to grab a paper. When the angle changes, his arm is in a different position and he repeats the previous movement.
Continuity mistake: The morning after Teddy's light-flash migraines, he and Chuck walk out into the center courtyard and look upon the havoc wreaked by the thunderstorm. Teddy glances up at the electric wires around the gated perimeter and sees a branch that had fallen and bent the line. In the first shot, the log is leaning into the courtyard. The shot then cuts closer and the log is leaning outside of the courtyard. When the shot cuts back to Teddy, the log is once again mostly inside the courtyard.
Continuity mistake: When Rachel is covered in blood she places her hand on Teddy's cheek. When the angle changes it's suddenly over his shoulder. The mistake is not due to the scene happening in an insane man's mind, it's not a plot-wise mistake.
Continuity mistake: In Cawley's office Teddy takes an aspirin with one hand and a glass of water with the other. Next shot his hands are empty.
Continuity mistake: Two cops run away from a wall when a tree falls in front of them. Half a second later they are standing still next to the wall, as if nothing had happened.
Continuity mistake: Teddy has a freckle or bruise next to the band-aid that appears and disappears all the time.
Continuity mistake: While talking with Teddy, Noyce's hand is either holding the bar or raised depending on the angle.
Continuity mistake: When the German officer is dying, his gun has a paper next to it. When Teddy kicks the gun away the paper is gone.
Answer: The bandage is a symbol indicating when and when not Teddy is caught in his delusions. When the bandage is on he is delusional, thinking he is the marshal finding out all the dark secrets of the facility. When the bandage is absent he is lucid and aware of his past crimes and his own delusions.
Wrong. It's on the whole movie until he takes a shower. The bandaid is off but yet that's the scene where he runs in the lighthouse thinking he's the Marshall still. Did you watch the movie at all?