http://www.abcgallery.com/D/duchamp/duchamp24.JPGWell, its possible to create a new work of art from stuff thats in the public domain. For example Duchamp's "Mona Lisa" with a stache is not much different from the original, but different enough to be considered an original work of art and would have a copyright f that was done in modern times. A slavish copy like a photograph however is not something that has a valid copyright. Figuring out what might be original or a slavish copy is rather subjective and difficult to do. The more it is substantially different and altered, the more likely it'll be considered a new work of art, the more it looks and resembles the original the more one can argue its a slavish copy that is also in the public domain.
Also, even though this image of Karlof as the monster is (let's assume) in the public domain, would it still be possible, in principle, for Universal Pictures to claim that my image infinges copyright on the basis of its similarity to their non-public-domain images of Karlof's monster? Or does the fact that there is at least one such public domain image undermine any such copyright infringement claim by way of "likeness".
Better to let the pros answer this one since Im not a lawyer. I will say though that nothing can stop people from sueing others and or abusing their copyrights to harass or extort $$ from people. Nothing can "stop" universal from suing you, all you can do is make sure if they decide to, you will most likely win the decision.
Still, its unlikely they would win any copyright infringement lawsuit if you used a public domain image as your reference. Since you are obviously not copying anything of theirs that is protect regardless of how similar it looks, then there is no copyright infringement to speak of.
Want you do want to be careful about with public domain images are if images are trademarked or you dont invade anyone's right of publicity or privacy. For example, there are old Disney images and movies that entered public domain, I believe Mickey and the steam boat, now while that stuff is in the public domain, you cant use the mickey character any way you want because its been trademarked.
Also right of publicity laws are always changing and vary from state to state, so it is possible that there are images out there of famous people where you would need their permission to use it so you don't violate their right of publicity. I seriously doubt using a pic of a guy in a full blown costume and makeup would infringe on any publicity rights or privacy rights since noone can actually see who is behind the getup.