Got the extra pixel nonsense sorted.
This is an easy mod, too, though it does require deleting a couple embedded textures in flags.dat (the game uses an external texture, I think the embedded one might be a SH3 holdover---that's where the row of pixels came from).
They won't look perfect in terms of where the grommets are vs the model, but you shouldn't be looking that close anyway (there are also no halyards, etc, either, even in stock).
I was THIS close to modding out all the flags since they are stupid anyway (show me a picture of ships steaming in war zones with flags flying (that are at
sea, not just entering or leaving port).
I still might, but they are more acceptable SMALL.
That's the size they have to be for the grommets to sort of line up---50% HEIGHT.