The flag is a layer of red for bottom layer. Second layer is an "X" created with pen filled with blue and a white stroke layer effect. Third layer is made with a star shaped brush.
To grunge up the flag I added some noise, rendered some fibers and a layer with a pattern fill. Some eraser and dodge used. Layer blend modes are linear burn and darker color.
Layer masked the skull, hat and glasses. Made some shadowing and merged those pieces. Duplicated the layer twice used hue/saturation and some inner shadow on one of the layers and filter>stylize>find edges on the other. Their layer blend modes are luminosity and linear burn.