Today on Stack Overflow, I flagged an answer for NAA and left a comment. The user then edited his answer to fix it, so I wanted to retract the flag. This was my first time ever retracting a flag, so I had no idea where it was. I even checked the flagging dialog for it. While this is where I found it, the button was blue. I guess my brain just assumed it was the same button that was used to post a flag so I missed it.
So I guess my suggestion is to possibly change the color of the retract button to a more brighter color like red, or something different than blue. Although red brings forth the issue of associating a more negative connotation of retracting a flag, so I am unsure.