I'm currently backpacking at South America and, as one could expect, a stay in Cusco and Machu Picchu was on the plans. The most curious flag I found so far is municipality of Cusco's.
This is the cusqueña flag:
The only difference between this flag and the current LGBT flag is that the latter has just six stripes, omitting the light blue. Curiously, the interval between the adoption of both flags is about one year, in late 1970s.
But it's is identical to original flag of International Co-operative Alliance (changed in 2001 to a logo-like flag). Most historians reject the ancestral origins of the Cusco flag, but a very curious theory links the flag to cooperative one: the original cooperative flag was proposed by Peruvian feminist Flora Tristán, after visiting a supposed temple dedicated to the rainbow in Peru. So, while the flag is certainly a modern invention, it may be indirectly linked to legitimate Quechua (the main ethnicity of Inca Empire) symbolism.
Due to the similarity with LGBT flag, a flag change was decided in 2007, not without polemics. The expected public consultation still haven't occurred, though.
Comments are welcome!