Hmm, if i were going to do something like this (and not being able to use the Ncloth:angery: ) i would probably model the flag in SubDs and use a wave deformer to animate it.
www.stevenegan-cgi.com
"Your weapons are no match for ours! People of Mars, surrender!"
"Um, this isn't Mars. This is Earth."
"Earth? Earth-with-nuclear-weapons Earth?"
"Yes."
[long pause] "Friend!!"