I turned the item into the guy in charge of games for Disney and he agreed with me that it looked like it was not official merchandise. I used to work for the company that stocks the prize games and I know for a fact that they wouldn't knowingly deal in bootleg merchandise. I also know that if I still worked there it would never have made it into a machine.
The moral of the story is that this is the sort of thing that can happen when a company like Disney farms out things they should be doing in house.
I found a picture on ebay of the Donald flasher.