Here are my examples of Wrapping an Image.They were a bit difficult , but they yet , here they are! The best one is the watermelon . Here are the steps:Open an image in Photoshop (Face, fruit, etc..) Duplicate the layer.  Convert one of these layers to a Displacement Map:
Convert to B/W
Adjust levels to make more contrasty (bring right and left sliders towards the middle of the graph)
Blur the image (Filter-Blur-Gaussian Blue - between 5 or 10?)
Save as a psd file.
Now undo all this and bring back to the original copy.
Now select the original image layer, open your other image (e.g. flag, pattern..) and drag onto the original image.  Resize this to cover your original image or the bit that needs covering.  Now deselect the original image and select the flag/pattern layer.  Go to Filter-Distort-Displace and type in 25 and 25.  It will then ask you to open the map you made.  When you do this you will see your flag distort.  Now select both this layer and the original layer and add an 'Overlay' blend mode.  This should work.  If it does, merge both these layers.  Make sure you have a copy of your original image (face). Now you can select the wrapped image layer and use the eraser tool to take away any areas of flag/pattern that you do not want.
http://ischools.ccrsb.ca/m19/mod/assignment/view.php?id=28520