Appearanace Configuration does not display flags with dropdown list for both

We are launching our site day after tomorrow and are very excited to have this feature.
When appearance configuration is set to both, flags don't show at all, only the dropbox. I tried choosing different flag sizes and checked our css to make sure it is not something from our side.
We also used this module on another site and same problem occurred.
Any suggestions, ideas or tips how to get this working?