This feature is an edited version of Downtown but with the launcher at the opposite end of the town. It is unlocked when you drag Granny down into the subway and onto the tracks so that the train runs over her.
In Block Party collect the explosive crate which is to the left of the construction worker who is sitting on the rotating donut. Then fly into the wall in front of you and 'Super Ooch' over the train tracks towards the police car and bomb the girl wearing the bikini 5 times (after each bombing press R1 to reset the level).
When you score at least 1,500,000 points in a single shot in PAINdemonium mode the Aftermanth mode becomes an avaialable option. Aftermath mode is a free for all where you try and rack up a hi-score to compete on the leaderboard.