i made this baby in me favourite raytracer Lightwave, i
was playing about with the more advanced features of lightwave
to do this.  i used displacment mapping to create the ripples 
and then used bones to warp the flag a bit so it wasn't linear
looking.

if you can't read what is said on the flag, it says 'ELITE',
i drew this in about 2-3minutes in dpaint.

bAD¢lANGUAGE/gE!