I was messing about with tricolours, and I came up with this design. The design itself (horizontal tricolour + shield/coat of arms) is nothing new, but I think it works well with Pennylvund's colours.
I think it would make a good government ensign, it doesn't really look like a military flag, but it still looks rather 'official'.
There's something off-putting about that design that I can't quite put my finger on. Maybe it just looks weird because the red shield blends too well with the stripes on the flag.
Personally, I really like the last design that Krall posted before that. (The Scandinavian one.)