1st issue:
I'm having trouble seeing this as wrong, in part because the circle covers some of the pixels that would make it clear where the smoke is in relation to the hero.
2nd issue:
Is the flag present on the castle on day 1 of the game? (If you know how to use debug mode, then you know how to check.) If not, then this is a map bug (it is possible to make castles without flags by hacking the map format). If so, then this may be worth looking into