Business owner Flew the United States Flag upside down in Protest, Is he right or wrong?

It is absolutely his 1st Amendment right. I'm not sure he chose the best way to protest this (I don't know that being denied a liquor license calls for distress signals, though I suppose his property was in peril and that is indeed considered reason for flying the flag upside-down). However, having had his First Amendment rights stomped on certainly is cause for distress. If the government itself is responsible for a loss of rights, when the government renegs on its promise, I definitely think that is cause for distress and it is appropriate to use the flag to express that distress.