But Squall's desert island was an illusion. It was created inside his head. This illusion; the background, the sky and Squall himself show colours consisting of black, brown, white, silver and grey. These colours are representing the 'depressed' side of Squall.
Then all of a sudden, the green colour comes out of no where and flashing. Then the sky goes back to normal (grey)
Green is way out of these colours' leagues. Is green a typical colour to represent the 'depressed' side of Squall? No!
I only have one explanation: this green thing was what powered Squall's illusion and hence these flashing greens.