How can I add a flag for reporting abuse on private messages using hook_privatemsg_message_view_alter()?
I really don't know why you don't like the answer by Rene.

Let me show a more detailed example.
You have to replace YOURMODULE with name of your module or theme.

/**
 * Implements hook_privatemsg_message_view_alter().
 * The &amp; for param $vars is important: we pass it by reference.
 */
function YOURMODULE_privatemsg_message_view_alter(&amp;$vars) {
  // Message author
  $uid = $vars['message']-&gt;author-&gt;uid;
  // Get flag for abusing user
  $flag = flag_get_flag('abuse_user');
  // Make flag module to check permissions
  if ($flag-&gt;access($uid)) {
    // Use flag API to show a flag according to flag preferences
    $vars['message_actions']['flag-'. $flag-&gt;name] = array(
      'title' =&gt; $flag-&gt;theme($flag-&gt;is_flagged($uid) ? 'unflag' : 'flag', $uid),
      'html' =&gt; TRUE,
    );
  }
}


Here I'm using a flag with name 'abuse_user':

You can edit Flag labels, link type and permissions here.
The result:
  

Please, feel free to ask questions.