I think there's a good chance the director will be Wayne Kramer, who is set to make a Graphic Novel adaptation with Stallone called Headshot
Would Kramer develop two Stallone films at once, though? I was under the impression that HEADSHOT and EXPENDABLES 2 are both set to start shooting in the near future.
Paul Verhoeven, anyone? MIA since 2006. And if you think doing a low-rent sequel is beneath him, he was at some point attached to direct Thomas Crown Affair 2 : The Quickening.
Interesting suggestion. I don't quite see it happening (then again, he seems quite happy to do "low rent" fare - see STARSHIP TROOPERS or HOLLOW MAN, for instance), but I think he'd be an inspired choice. He also has something of a background in action, being the director of ROBOCOP and TOTAL RECALL. At any rate, I think he's the kind of director Sly should be looking at.
A rather far-out suggestion would be Adrian Lyne. I gather that Stallone is a huge admirer of his work. Seems far less probable than Verhoeven, of course, but I hope that EXPENDABLES 2 has an exciting and slightly surprising choice of director.