Theres this bend that SRV does that I cannot figure out. Its a bend while playing a chord with some crazy right hand technique. It makes the crowd lose their collective shit. It starts at 3:20. What exactly is he playing?

Hey man!

out of what I can see and hear he's bending more strings, attacking the bend itself with the right hand more towards the bridge and continuing more towards the neck.

i don't think there's any particular trick to this... it's just that he's SRV which makes him awesome by nature

To me, it looks like he's alternate-pick scratching up the neck while holding/releasing a single note or two,
or maybe doing 'the rake' trick looped, laying the fingers across the strings, also palm muting with right hand, sweep or rake the pick quickly over the string(s). Lift the right hand up at the last note to make sure you don't mute it.

Probably at the 12th harmonic note A, D, and/or more strings.

I'm not sure if SRV is in Eb tuning.. I think he is.. but to get the same lick on my guitar in standard I have to play these notes:

-----14--------------------------------
-----14--------------------------------
-----13(bend up a whole tone)----
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----------------------------------------
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He frets the E and B strings with his pinky and bends the G string up and down rhythmically using his 3rd finger, whilst strumming alternately and moving back and forth like Cosmin and Azzaboi said. Sounds like he's playing in Eb minor in the 12th fret box position. Just move up or down a fret depending on your tuning. Hope that helps.

I can't provide any instructional advice however that was truly impressive.

Thanks guys, much appreciated Ben, where you able to get the right hand technique?

I didn't try it that long.. just picked up the axe just to find the notes (unplugged) so not yet