Alternate ending begins from the Ferry scene.
The civilian boat blows up, and batman is like "noooooooo!" At first he is just pissed that Joker put the people in such a vulnerable position. He tries to explain that of course the convicts killed the innocent people. He thinks he's won the logical element of the argument which he thinks is what he has to do rather than just kill the Joker.
Then the Joker tells batman that he played a joke on the people in the boats and that it turns out each boat had the trigger for their own boat's bomb on board rather than eachother's, so actually the Civilians are the "hungry dogs eating eachother at the first sign of trouble," and the criminals had more civility.
Then the joker is like "AHHHHHHHHHHHEHEHEHEHE! and then the convict boat blows up too. In a fireball behind a silhouette of the Joker. "You see, I told you I was ahead of the curve."
Joker lays the smack down on batman. Que action packed fight sequence.
Two face makes another appearance and reinforces again what Joker had said earlier during the interrogation scene about human nature and what people are really like when the chips are down.
This could give us a chance to see the more compassionate relationship between Harvey and Bruce from the cartoons, where Batman has trouble fighting Twoface, and tries to reason with him. But of course it doesn't work.
And Twoface isn't alright, he was clearly injured from the fall (the fall which killed him so anti-climacticly in the original ending) but not killed (as Falcono foreshadowed when Batman pushed him off a building from the same height earlier in the film.(saying so bluntly "a fall from this height wouldn't kill me.")) And his face is majorly decaying. It's clear that the infection is going to kill him soon. Adrenaline can only take a burn victim so far without skin grafts.
--Blah blah more fighty more talky, cut to--
Joker says the "which reminds me, you know how I got these scars" line, Batman says "no but i know how you got these" sends joker flying and catches him with the bat grapler. Pulls Joker up. Joker gives the whole "I think we're destined to do this forever," speech. Harvey on the other hand looks dead already on the floor. Batman contemplates rescuing them. Then there's an explosion from bombs planted in the building rigged up by the Joker, intended to kill the both of them.
With no time, batman leaves Joker and Twoface there and bolts from the building. the camera pans out revealing the flaming bat logo just like it is on the poster. Joker's last joke. They both die either because of the fire or the fall. Whatever.
Batman instructs Commissioner Gordon to inform the press that Batman is responsible for the ferries, and he is also responsible for the Death of Harvey Dent. Everybody is to hate Batman and nobody knows what really happened because "sometimes the truth's not good enough." (Isn't that the moral of this movie?)
Even if Batman killed Joker, Joker would still win if people found how that all those people on the boats killed eachother. The best thing for Batman to do is eliminate the joker and twoface ("break his one rule") and take the heat upon himself. Even though Batman didn't actually do anything wrong, he exists only as a symbol, and it's okay for people to hate him, he's a vigialanty, he's not a good example anyway. The end.
Now you have a better death for Twoface, plus more screen time. A more realistic outplay of the ferry scenario, a reason for Heath not to come back in part 3, and more fight scenes. I wish it ended this way :(
Or how about if when twoface comes back he tries to kill the Joker? Maybe he succeeds. who knows? stay tuned for an alternate alternate ending!