If/when I port to ARM I will probably conditionally compile to use atomic operations (or at least an explicit memory barrier) when on ARM, but for my x86/x86-64 code, since I don't need to, I'd rather avoid it. As you said, it would be overkill.
Since this is the only case where I do something strange, I don't mind handling platform specific code myself. The rest of the codebase delegates such things to libraries.
The only thing I can see that you'd have to worry about is the reads and writes to "flag". Technically, it's only assumed to be an atomic operation and while that's generally not a bad assumption for 8-bit variables on x86 SMP, it'll probably give you some trouble on Itanic and ARM. You may need to use an explicit memory barrier.
x86 or x86_64 SMP architectures will generally have an implicit memory barrier for all volatile reads/writes on simple data types, but I'm fairly sure this doesn't hold for ARM. In particular, Visual Studio 2005 and up will treat all volatile reads as membars with acquire semantics and all volatile writes as membars with release semantics.
If you have access to pthreads, a conditional variable would do the trick - but probably overkill. It all depends if you want to let pthreads worry about the portability and all the cpu-dependent ifdefs and ifndefs or if you're willing to code the membars in yourself.