The flag is obviously a memento of some sort, which explains his name on it. "'K' C" could mean anything (Kansas City?) but the arrangement suggests "'K' Company", which presents another mystery within your mystery. Every regiment, tactical or training, had a K Company.
Also, ". . a man named at one time . . ." implies he either changed his name or served under an alias. Your mystery will probably remain such until you come up with a lot more info.