We have an one hour pixel video with 10800 frames (3 frame per second). Each frame contain a 8x8 grid of colored squares.
I didn't solved this task during the game, and today after a huge number of unsuccessful attempts, I finally solved it. No LSB, MSB as I thought.
I've even found that squares with indexes [0,0], [4,0], [0,4] and [4,4] are filled with more solid color, but alas...
The solution of this task is to stare at video and notice that some of the squares with white background sometimes contain some text and images.
Here is an assembled flag frame: