Hi,
I have worked on several Arduino projects. I am listed low here because of missing "C programming" tag. Anyway, we need to digitize the flag with 32x32 sampling space and that will give the binary value for a flag and then we need to manage the data to sequentially send it to the board. We need to see how to how much memory it consumes to store the flag data. As per adafruit site, 1600 bytes of RAM is requires for the screen memory. But to have a big image stream like attached one we need more memory and we may run out of RAM. So we need to check this with real coding and hardware.
Thanks!