Dale,
It seems that Armstrong did indeed give the flag
to the State of SC.
"W. Banks Dove, Secretary of State, yesterday received
one of the battle flags of the old First Regiment South Carolina
Volunteers, McGowan's Brigade, from Col. James Armstrong of
Charleston with the request that it be placed alongside the blue
flag now in possesion of the South Carolina Relic Room."
The article goes on to state that Armstrong received the flag from
the niece of Charles Whilden.
The article can be found in the Columbis (SC) State of March 4, 1922.

Ken Legendre