Well, we'll keep looking.
I have found that this Bushnell lady (the daughter of the Union officer that "captured" the flag) donated a large collection of archives to Peabody Museum of Archaeology and Ethnology, Harvard University. They don't have the flag but there is a clear pattern of her preserving important items by putting them in museums. This lady even wrote a fictional book mentioning specifically the Pointe Coupee Artillery and its flag which, in her book, was made from lady's dresses. (You can see this book on Google Books). The point being, she knew what she had and there are accounts of she and her son taking big steps to assure it was in good hands.
We'll find it.
Jack