i told you and it's in your message:
loopI = setInterval(loopF,40);
to start the waving.
to stop the waving.
// do not edit the below code:
// move the matrix by speed along x to shift the noise
// drawing in the perlin movie clip,
// create a rectangle with the perlin noise
// drawn in it with an offset supplied by the
// shift matrix
// draw the displacement movie clip in the
// displaceBitmap (used in displaceFilter)
// apply displaceFilter to the flag
flag_mc.filters = [displaceFilter];
Yes, I see that you put that in the original post, however I'm very new to flash as I explained and simply need to know where specifically to put the start / stop code.
you put that wherever you want to start and stop the loop.
for example, if you have button that when pressed should start the loop, then put that start-loop code in the button handler.