Okay, guys and gals... Let's say, for the sake of argument, that Scar and Zira were mates. Now before some of you freak out and tell me 'No, that's impossible' work with me here okay?
Let's say they were mates. Then, yes, by marriage, Zira would be related to Simba. By marrying his uncle she would be his aunt and any cubs Scar and Zira would make them his cousins.
Let's say that Nuka (And yes, I believe that Nuka is the son of Zira and Scar, so what) is the son of Scar and Zira. He would be Simba's cousin.
The same can be said with Vitani (my opinion in there along with it). But, we don't really know if she was Kovu's sister aka littermate, even if they have the same mother, or if she was born during Scar's reign. (Hard to know, considering Simba's Pride is sooo screwed up. And no, that's not my opinion, not really. A lot of people here believe it. Me being one of them.) Or, Vitani could be the daughter of Tojo and Tama. Another great speculation. Really

And Kovu... well, there a lot of ways to go about that. No matter what that pitiful movie says! All right, onward with Kovu.
1. He could be, as some have speculated, the son of Chumvi and Kula. I can go with that and could have inherited his Outlander genes from a distant member of either Chumvi or Kula's families. Doesn't matter, does it? Okay, good.
2. He could be the son of Chumvi and Zira. Zira winds up using Chumvi, or another good lookin' dark brown lion rogue, in order to provide a good heir for Scar. So strong and twisted is her love for him, right? So.
3. Or, and here's the kicker folks. Scar could be Kovu's father. (Okay, really, I don't want people telling me that's impossible because of the creators of Simba's Pride say it's not. Really, who cares? They themselves don't know.) Anyway, as I was saying, Scar could be Kovu's father, having taken a lioness, either Kula or another pridal lioness by force because he was frustrated at Zira for birthing a pitiful lion cub like Nuka or a female like Vitani.
Okay, there's my 'more than two cents' on this.
So, don't freak out people. It is possible. All of these scenarios are possible, despite what the movie says. It's a poor excuse of a sequel in more ways than one.
In short, are Kovu and Simba cousins? They could very well be.
"Oh no, but that would make Kovu and Kiara related," you would scream out. "Incest, incest! They're second cousins, they can't be together!"
Sorry guys and gals, but They. Are. Lions! Yes, lions though they human minds and human emotions. So what? Does that really change anything? You can have that in a fanfiction but not in a Disney film? Hello people!
Remember the Hunchback of Notre Dame? It was dark, very much so. It used to scare me as a kid, but then I started to like it. Well, didn't Frollo, the villian of the movie, lust (yeah, that's right, I said lust) after the gypsy girl Esmerelda? Yes, he did. How is it that Disney could go with that and not go with incest in another movie?
Animals don't care about this stuff. Just because they're given human minds and emotions doesn't change what they are on the outside. Human cousins - especially in royal families, often married.
Would you really allow such a possibility destroy your like or love of a movie such as The Lion King?
Think about it and think about it really hard.