Flying a US flag upside down like that is a (proper) permitted sign of distress.

It has taken on other meanings, mainly of protest against one thing or another. It was common among the Tea Party folk to fly it upside down during Obama's presidency. Likewise there was a call to fly it upside down during Trump's first 4th of July in office among, well, just about everyone. Anarchists did it for a while, etc.

Why Canned Heat's art direction did it, I don't know.