Nice theory, but untrue. There are other burning US flags, in at least one other episode that I can think of, "Birth". During the montage of Letter N doing coke, voting, shooting heroin with a rat, etc.
Also, it really isn't obvious. The cut is practically mid sentence. It's not like they faded it out.
Here's my point: Hobo Ops is one of my least favorite bits, But Still, it interrupts the flow. Don't they watch these DVD sets before they put em out?
"Go Gators!"