I like that picture too. I just saw a copy at the flea market last weekend and I almost bought it. And yes, I get caught in the same conundrum as you. Thing is, it was a very brave thing to do; they lost their medals as a result, and I can't help but admire them for what they did. (For another spin on that, there's a wonderful movie "The Loneliness of the Long Distance Runner" -- available on video.)
I think if you're an oppressed nation/race etc. and you're supposed to follow the program and perform under some other official identity, it's a step forward to assert what you feel is your more genuine identity. But, I think it's a transitional step, not the final one. The misfortune of identity politics is that it does make it the final step.
"Specifically/American": what I was trying to say there is that it may be possible to play in counterpoint to a specific national anthem in order to transcend it. I mean, after all, if Hendrix played the SSB in such a way as to make people feel that he was criticizing something or revealing something about the reality in this country, he could only have done so by appealing to values which go beyond jingoistic patriotism, values which may not be specific to any one country but are universal.
Joanna