Flag in the wild:

Waving flag of Y Wladfa

The flag takes the blue-white stripes from the Argentinian flag, and the red dragon is a Welsh symbol, although they both take non-standard forms. I’m not able to confirm it, but this may be due to the flag predating the standardization of the Welsh flag. A version using standard elements also seems to exist:

Argentinian flag Welsh dragon

Wikipedia page about Y Wladfa