Revealing mistake: In the final match between Daniel and Johnny, you can see Daniel covertly tap his left leg (the bad one) so that Johnny knows which knee to grab to hurt him.
Suggested correction: I just rewatched this moment and see that Daniel is instinctively tapping his sore leg, with the bandage there, not sending Johnny any private signal.
Continuity mistake: During the bathroom scene where Daniel is about to take revenge out on Johnny, watch as Daniel uncoils the hose - it is very long and has several obvious kinks in it. However, as he turns on the water and Johnny runs out, the hose is a perfect straight shot, and MUCH shorter (and water flowing through the hose would not do this).
Continuity mistake: In the scene where Daniel is riding bike home from his mother's work and Johnny and his pals are chasing him on their bikes, they kick Daniel down the hill. As Daniel is rolling down the hill, you can see that it is a stunt double with no cuts on his face and when Daniel re-appears in the shot, his face is bleeding.
Continuity mistake: When Daniel is eating in the restaurant with his mother, from the exterior shot looking in the window, Daniel's hand is underneath his chin. But when it cuts to the inside of the restaurant, his hand is suddenly down near the table.
Continuity mistake: During the skeleton attack by the locked gate, at the bottom of the gate, there are sandbags that disappear and reappear between scenes. Possibly there to stabilize the gate when Johnny flies into it.
Other mistake: In the semi final match between Johnny and Duval his name is listed behind them on the board as Vidal. But you can hear him being announced as Duval.
Suggested correction: He doesn't say "Duval", he says "Darryl Vidal." While the character isn't listed by name in the credits, only listed as "Karate Semi-finalist", he was in fact played by Darryl Vidal, who was an actual black belt at the time of the movie.
Continuity mistake: After the Halloween fight, none of the Cobras injures the next day match what happened to them the night before. Johnny had a black eye although he was only flipped and chopped in the chest. Tommy had his arm in a sling, but he was kicked twice in the stomach.
Other mistake: The end tournament is supposed to be only the very best trained fighters in brown and black belts. Yet the majority of opponents against the Cobras are easily defeated, with weak tactics, unlike Daniel-san and the Asian guy, who actually use fight techniques.
Suggested correction: Although this observation is accurate, keep in mind that the Cobras have a reputation as dirty and vicious fighters so it is very possible their earlier opponents were intimidated by them and therefore easily beaten.
Continuity mistake: In the final country club scene when Ali is dancing with her father, she glances at Johnny sitting at the table, as her father asks her about how she and Johnny are doing. Then a second later, Johnny is suddenly behind them on the dance floor with Ali's mother.
Continuity mistake: When Mr. Myagi and Daniel go to the dojo to stop the fighting, the earlier scene revealed that they left the apartment at 10am. Assuming that there was some time to get to the dojo, they left a few minutes later and then drove to Mr. Myagi's house to start the training. Daniel starts to wax the cars and the sky is showing a sunset. At the latest, it may have been around 11am when they got to the house, so there is no way the sun could be setting.
Continuity mistake: In the very beginning, when Daniel and his mom start to drive away from their old house in New Jersey, Daniel's bike is strapped to the roof of the station wagon. The bike is positioned with the front tire of the bike facing the back of the vehicle. A couple seconds later, in the very next cut scene, the bike is facing the opposite direction.