This response is provided based on the information you shared and should not be used as the sole source for making a decision. You should seek guidance from the chain of command, IG, JAG or other certified agencies before making any decisions. How you chose to use this information is totally up to you and is your sole responsibility.
IAW AR 600-8-2 you are supposed to be notified within 2-3 working days of a flag being imposed. The fact that the command forgot to impose the flag unfortunately does not change your status. If they forgot to do it at the appropriate time they can choose to backdate the action to the actual date and revoke any favorable action that occurred during that period. The command might have been able to make an exception to policy and date the flag as of the date they discovered the error but this would be at their discretion.
With that said you could try to appeal the action under AR 600-8-22 to the awarding authority or the commander that has the ability to approve the award. They may provide an exception. If you chose to do so you might want to prepare a well written statement based on facts that is unemotional, clam, and professional. Provide any evidence or issues of mitigation and/or extenuation. You might also request to appear before them in person on open door policy.Hope this helps to some degree.