To reiterate Tom's post about Mobile having flag makers, Henry Vaughan is a known maker who made large sized flags, including one taken at LaVergne, TN in October, 1862. This flag, in the collections of the Illinois National Guard, bears Vaughan's mark.
Another large sized flag maker in Mobile was R & D. Bush.
Henry Cassidy of New Orleans also made large sized flags along with the flags for Bragg's Corps.
These makers did not have to live where the flags were used - they just had to get the orders to make them.
Greg Biggs