After posting my question and doing more searching, I answered my own question. Well, actually, DivingDuck answered my question without really knowing it. In the installation instructions for his flag mod v1.1, he mentions that the new flag.dat and flagS.dat files can be renamed or not, and that the game 'finds' the files regardless of the file name. That was my clue. When I installed the new flag.dat and flagS.dat files into my library folder, I re-named the original files old_flag.dat and old_flagS.dat, in case I wanted to go back. I wondered if the game was ignoring the new files and 'finding' the old ones. Sure enough, when I deleted the old files from the library folder, and tried the game again, two Norwegian warships had the proper 'triangular' naval flag! It's an old lesson I need to keep relearning - SH3 has a tendancy to locate old data even if renamed. Hope that helps someone out there haveing a similar issue, and thanks DivingDuck!
