I first started with a white canvas and added the red lines and the blue box.
step 2 of 6
I then selected parts of the source image to use as a pattern and selected one red line and added a new layer. I pasted the pattern into the selected area and then did this over and over for each red line. I merged all those layers (not background) and brought the opacity down.
step 3 of 6
I did the same steps for the white as I did for the red. I then added shadows to the white layer.
step 4 of 6
I did the same thing for the blue box.
step 5 of 6
For the stars, I first selected the screw in the original image. I then changed it to a negative image. I selected again the part I wanted to use (some edges I didn't want) and deleted the rest. I adjusted the brightness/contrast and then resized it.
step 6 of 6
I copied and pasted it as a new layer into the flag image and repeated this until I had 50 "stars". I merged all the star layers and then added a shadow to them.