I'd also use the green used in the original picture, and possibly add a white section behind the "American" to mimic the current logo.
I unfortunately have no branding horror stories upon which to draw, but I'd say it's an incredibly important subject for designers to understand. We're the ones designing these things and clients often don't know the full significance of design, so it's really up to us to know what we're doing and try to steer the client(s) towards the best branding practices.
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