Greg - It does sound like that may be the case. However, it seems a little odd that a company from another town (and especially from another state) would be presented a flag by the people of Waterloo (both of the young ladies mentioned can be found on the 1860 census in Waterloo). Maybe the close proximity by water had to do with that. I would imagine that they were connected by a regular ferry service, so there may have been quite a bit of commerce between the towns. Another possibility is that the flag was for the Waterloo boys, and the Eastport company was just invited over for the ceremony. This is purely conjecture, but it is quite possible that the Waterloo company was not accepted for state or national service and the members eventually joined other units.