Bianchigirll, that photo isn't of the actual bike, but here's the actual posting (which i spose would've come in handy before) http://toronto.en.craigslist.ca/tor/bik/2274365032.html.

As you can see the "flag" part was scraped off, but Idon't think there was other colour there.

And I'm quite positive the fork is stock as it says "bianchi" on it, along with "i****awa" which i spose may indeed indicate it was Japanese.

edit: aha, that is supposed to say "ishiwata".