It was Howard Madaus' opinion that this Third Bunting was issued in 1862, replaced in May 1863 when Kershaw's Brigade got new flags with battle honors and then used again when the flag with honors was captured at Saylor's Creek. Thus, if this is the proper history of this flag, and I happen to concur with it, that this flag saw use in NC in 1865.
The history for it in terms of where it came from is solid.
Greg Biggs