Source: "Flags to Color from the American Revolution."
This one is "Crescent Flag of South Carolina," and the colors are listed as "Blue field, white crescent." This flag is very similar to others I've seen, usually listed as the Fort Moultrie Flag. The difference, though, is that this one has the word "LIBERTY" in the crescent instead of across the bottom of the flag.
"On Sept. 13, 1775, Colonel Moultrie received an order to take Fort Johnson, South Carolina. He had this flag made, for the troops wore a silver crescent on the caps inscribed 'Liberty or Death.' 'This was the first American flag displayed in the South,' he said. On June 28, 1776, the crescent flag, with LIBERTY across it, was raised at his defense of Sullivan's Island, later Fort Moultrie."
Randy Young, 23 February 2001