Is this the flag in the ruins of the old temple? You will see the temple on the right as you cycle along, after exiting the tunnel. Do you remember that stone ledge on the right of the sealed road that had a flag on when you did earlier cycling courses (possibly island view?), well the entry to the temple is at the end of this stone ledge. It has a grass entry (sometimes with a red/yellow ramp) and then a stone path which narrows and follows the cliff edge. Miis run up and down this path. Follow the path to the end and then up the paved stone ramp - this leads to the ruined temple. The flag should be in front of you on the grass with miis waving you on.
If that's not the right flag, let me know. I did the whole course a couple of times after I posted the clues last night and that's the first you come to after exiting the tunnel (assuming you enter the tunnel at the beach end).
BTW, a good tip is that if you see miis waving at any time, it's likely there is a flag/balloon nearby. If miis are running in and out of caves, along paths etc, there's probably something along their route. Red/yellow ramps can also be a good indicator.
Good luck