When is a good time for an American to display a Mexican flag?
Never.
Well, they have the right to celebrate the culture of their country of origin (although I wouldn't; it's a lousy culture and that's why I (or rather, my parents) left it), but displaying the flag of any country but America isn't, well, American. I mean, flag isn't your culture. Flag is used to identify your allegiance. And, if I recall correctly, when you became a citizen of United States, you absolutely and entirely renounced and abjured all allegiance and fidelity to anything other than the United States of America. If you didn't, well, guess what, you were never a citizen because your naturalization ceremony wasn't valid.
Celebrate your culture and heritage all you want. The great thing about America is that it's a melting pot, changing and reshaping itself with every new people assimilated into its culture, not a mold that reshapes every one of its new citizen to its own old, tired image.
BUT, don't celebrate your culture in such a way that it could be considered in any way that can be construed as allegiance to any country other than United States of America. If you want to protest against the government (and you have every right to do that), burn an American flag. That is the patriotic thing to do, especially if the government is leading the people astray. But if you ever display any flag that is not American, then you are a lowly traitor, no matter how noble your cause may have been.