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Press CTRL+N to open a new document.

Type the name of document.

Enter the desired Width, Height and Resolution.

Click OK.

Select the Move Tool (V) and move the flag and the brick wall to the new document.

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Select the UK Flag Layer and change the blending mode to Hard Light.

Select the Brick Layer and hit CTRL+J to duplicate the layer.

Move the layer above the Flag layer and hit CTRL+SHIFT+U to desaturate it.

With the copied layer still selected go to Filter-Blur-Gaussian Blur.

In the blur dialog box enter the amount of blur desired for this tutorial 1px will do just fine. (experiment to get the settings you like, tis layer will be used later on as a displacment map.)

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Select File Save As or hit SHIFT+CTRL+S to save the displacment man you just created.

Select the Flag Layer and go to Filter-Distort-Displace.

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In the displacment dialog box enter the Horizontal and Vertical scale.(experiment with the settings to get tthe desired result) Click OK.

Select the Displacment Map you saved erlier and click OK

When the Displacment Map filter is applied it has a dramatic effect, although the distortions look random, they line up precisely with the wall.

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Select the Brick Layer and in the Blending options choose Hard Light. Combining the displaced flag with the duplicated Hard Light brick wall layer produces a more realistic effect.

Set the Opacity to 80% just to give the layer a more natural look. (Play with the settings to get the desired result).

(Roll Over Images)

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Here are some other example using the same technique.

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