Yes, Blue Seed 2 exists. I have the first episode 
fansubbed. Literally *years* ago, it was bought 
by some company (no one seems to know who - I've 
asked fans and fansubbers alike) for a domestic 
release that has never happened. Because it was 
bought, the fansubbers graciously stopped subbing 
it - and so it has all but vanished. ~_~

At least the first episode and one more were done 
with cels, since I have three cels from it - one 
an OP cel, and only one of the other two is in 
the first episode. From the frequency that the 
cels pop up, I get the feeling it's either a very 
short OVA, or wasn't done fully with cels - or 
both. At least the first is probably right, since 
I've seen only one laserdisc on Yahoo Japan for 
it. (A couple times, but still only the same one.)

I know this isn't too big a help, but there isn't 
much to say. It vanished off the fansub circuit 
about four years ago and I haven't been able to 
find out squat about it since. I'm a huge Blue 
Seed fan, and thanks to hard searching, I have 
the first episode fansubbed, the OP/ED CD single 
and three cels - that's it. (I skipped the 
laserdisc since I don't have a player, much less 
a Japanese-coded player.) I get the feeling this 
OVA wasn't very popular in Japan, and the US 
market as a whole hasn't really drooled over the 
original show either. ~_~

Many Sharp Smiles,
--Drac