I'm not really sure what ForceHSS is expecting to see on the live site (especially since, from the given code, that site is obviously vB3.x, and this is the vB4 section).
Adding such an image to the background of a post per se is rather trivial with CSS.
The interesting part is how to decide whether the post has been reported or not. If you configure vB to open a thread for reported posts in a hidden staff forum (Admin CP -> vBulletin Options -> User Infractions & Post Reporting Options->Post Reporting Discussion Forum), this can be quite easily achived, there's not even a need for a plugin.
Look at the post table. There's a column named reportthreadid. If a post is reported and a thread created in the staff forum, this table will contain the threadid of that thread.
So, the only thing to do is to check in the postbit (or postbit_legacy) template if that table field is 0 or not. If it is != 0, then a thread has been created, and the post has been reported.
Using an if condition you can use this to add the needed css code.
Try this:
In postbit (or postbit_legacy) template find:
<div class="postbody">
Replace with:
<div class="postbody"<vb:if condition="$post['reportthreadid'] != 0 AND in_array($bbuserinfo['usergroupid'], array(5, 6, 7))"> style="background: url('http://www.smilies.4-user.de/include/Brutal/smilie_b_018.gif') top right no-repeat;"</vb:if>>
Done. This adds a rather martial smiley to the right top of the post background, visible only to usergroups 5, 6 and 7 (admins and moderators).
Of course, you would replace the smiley I used for testing with a more sophisticated banner, and you can do whatever additional css magic you like. And remember: It is essential that you configure vB to open a thread in a staff forum upon a report. E-Mail notification to Admins and Mods is not enough.