Well if you a true comrade you should appreciate the red coloring.
The first thing that came to mind when I saw it in game was, "The irony..."
Saved your flag, put it in game, worked fine. No red or black.
All I did was add it to graphics/factions/custom, create a crest version (256x256) of it and add it there too, then copy one of the flag fields in player.faction and put the corrainia flag and crest address.
I suggest you double check the .png you are telling it to load and make sure it actually isn't black and red.
The file in the link was uploaded from the file in the folder, so unless I've gone crazy, it isn't red like that.
Strange, though... I'll download the image off of the link I sent and see if that clears it up. Maybe there is some underlying layer corruption in the image file?
I'm p. sure it won't actually be red.
I had the same issue when I made some Alpha Centauri stuff, and the Universty flag came out red like this.
Never did figure out what was causing it.
I'm not sure where to check, because I'm rather new to the game and I don't remember how often you see your own flag after you pick it. Either way, if I figure it out, I'll be sure let you know on this thread.