The Thing/Hocus Pocus - S4-E16
Continuity mistake: The Thing: When Squidward is riding his bike on the road, he hits a cement truck, and gets covered in cement. He tries to get out of it, and a shot later, the location suddenly changes from the road to a green hill.
Procrastination / I'm With Stupid - S2-E19
Other mistake: I'm With Stupid: When Patrick and his "parents" make fun of Spongebob because they believe he's stupid, he gets so frustrated that he runs through the wall, leading him right outside. This makes no sense, because they are in Patrick's house and the inside of it is underground.
SpongeBob Meets the Strangler / Pranks a Lot - S3-E20
Other mistake: Pranks a Lot: When everyone is cheering on Spongebob and Patrick at the end, Sandy whistles by putting her hand through her helmet. Impossible.
Whatever Happened to SpongeBob? (WhoBob WhatPants) - S5-E18
Continuity mistake: Near the beginning, Spongebob picks up Gary, and some of his slime falls on the floor. When he hugs him and breaks his shell, the slime is gone.
Have You Seen This Snail? - S4-E3
Revealing mistake: After SpongeBob tells Patrick, "I can't find Gary," text that reads "Rough Draft Korea" briefly appears on screen during the bubble transition. (00:08:24)
Have You Seen This Snail? - S4-E3
Other mistake: When Gary comes back at the end, when Gary meows and Spongebob says, "Yeah, like that," the tears in his eyes disappear for about half a second.
Bummer Vacation/Wigstruck - S4-E14
Other mistake: Bummer Vacation: When Spongebob says, "You're right, Gary. It is unhealthy to think of the Krusty Krab while I'm on vacation," his legs are missing.
The Snowball Effect / One Krabs Trash - S3-E3
Other mistake: One Krab's Trash: When Mr. Krabs sticks the ghost drawing in Spongebob's window with the fishing rod, the shadow of the paper is visible on Spongebob, but there is no shadow of the fishing line holding it up.
Answer: I believe this is the Season 6 episode "Spongicus".