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I'm having issues making my green stuff cape less lumpy so I used some sand paper but dont know if I should do an other layer of green stuff.

The sandpaper you used was a very coarse grit, it seems - way too coarse to leave as a final finish. As it stands, all of those scratches and gouges would show through paint, unless it was applied thickly enough to be a problem, in its own right. Adding another layer would help smooth it out, but also add to the bulk. I might consider cutting some of it away and starting the surface fresh, taking greater care to keep things smooth before things cure, this time. It may actually end up being less work than trying to salvage the current surface (and extra sculpting practice, which never hurts ).