A couple of things here,
1. why can't they use a flag as long as proper respect is shown,and 2. you may want to check about a quilt resembling a flag,many Vets see it as disrespect to the American Flag to use the flag pattern in things such as atricles of clothing etc,I'm sure Red White and Blue would be fine but maybe just not in a American flag design.
Please do not take offence,I think it is Very propper and respectful what you are doing,and I would certianly proceed. I just don't want you to go to all of this work and not be able to use them.
Let us know what you find out,and I have some patriotic fabric I will be willing to donate if you need some.
Thanks,
Rae Penn