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I believe that was proven false. Gomi, I bought a Japanese flag at a Japanese Navy supply shop. They also sold uniforms and stuff like that. They had flags of all sizes and Imperial as well hinomaru.
I think it was proven false that she was the ring leader of the pranksters as the main problem was is that she was punished with banning effectively ending her swimming career but the other guys were just slapped on the wrist. One report says that she apologised, returned it and then the emperor gave it back to her as a gift. But I can't confirm that.
She was just not seen as "proper" by the stuffy Australia Olympic Officials and when the hijinks caused such a kerfuffle, they really came down hard on her. The original "Tall Poppy" I think.
I have actually met her a number of times as my dad used to work with her. She is not a bad old stick.
Will look into the navy shop - thanks AK. Might also give good old Tokyu Hands a run. It is a gift for a flag collector friend of the family.