Trying to find a movie that I can't remember the name of but only remember vague details.

I had a flash of a scene from a movie I saw as a kid, and I have been trying to find and have been failing, figured I should ask a large audience and see if someone else knows it. 

Here's what I remember:

Movie starts with a monster attack on a movie theater, it is clawing its way through the screen, people are running away, the hero and heroine rush in, telling people to get out. As if they need instruction. Once the people get clear, the hero hefts a bomb at the mostly concealed monster. Only its claw can be seen. Bomb explodes, killing monster, and the hero and heroine share a tender kiss. Credits start rolling. 

Its revealed that the previous scene was in fact a movie the real hero and heroine were watching at the theater. Naturally, a real monster starts attacking people at small town. There was one scene where a couple is doing the deed in a car in the middle of the forest. The boyfriend dies, not sure how, but the girl is still in the car with the doors closed. The monster rips off the door and grabs her. She grabbed the door handle of the other door to literally hang on for her life. Her hand slips and gets eaten. Police find the scene and all that is left is her leg from the thigh down. 

The hero learns about the monster and seeks out an old man who knows something about the monster, who's reluctant to help but does so anyways. They concoct a plan to hide a bomb in a carcass, either it was an animal's or it was the leg of the dead girl. The monster attacks the movie theater, at the same time the scene from the movie is playing and the monster is attacking in the same way, but there is no hero this time. The monster finishes it's attack on the theater and starts a rampage in the town where its revealed to be something like a giant monster head with tentacles, it's skin black and slimy. The hero and the old man show up in a really sweet roofless car, they offer it the bomb-filled carcass. The monster eats it then explodes, leaving behind a crater then three seconds of cheering later it crawls out of the crater unharmed. "It can regenerate!" the old man exclaims.

That's all I can remember. I'm not sure the year of production, somewhere around the 70s through the 90s. I also cannot remember if the creature was claymation or cgi but i'm fairly certain that it's claymation. Something about the way it moved makes me think it's claymation.

I would appreciate any help given