Made with blender and GIMP. 50 vertices, 37 faces (most are quads), the flag is rigged and animated. You might just replace the texture with the player color, emblem or whatever in-game.

The animation does really look artificial. If anybody improves it, please share!!

The texture is a copy/paste of:
    * laobc's heart shield: http://www.opengameart.org/content/heart-shield
    * tidbit's wood textures: http://www.opengameart.org/content/3-highres-wood-textures
 
You might just don't really need the wood texture and can just use a basic material, it already has the correct color set.  I put it in because else the texture space is wasted.
 
This model is made to be exported in games.