GOD, I made it. It was very simple: it has to do with the added banners to third age (and posibly any mod that changes banners)
I dunno if it helps now, but this is what I did:

I followed the instructions on how to get over the medieval.preferences.cfg and make it so:

Show_banners: 1

I even made the same alteration in the Third age total war cfg (TATW.cfg)

Still, no change.
It was still not showing up.
However, after much search, I figured it out. Here's how:

1 - Go to the third age total war folder.
2 - Open data folder.
3 - Copy the banners folder (all of it) and MOVE it to your desktop, documents, wherever you want.
4 - Now, go down the data folder until you see a file named: "descr_banners_new" and do the same to that one.
5 - Just to be clear, you should MOVE both of these items, so that the third age total war data folder will no longer have those files.
6 - Done. Enjoy, it took me a while to understand that it was a basic conflict. I don't know if anyone has figured it out, but nothing else had worked for me. I haven't tried reversing it, but it should make both games run with the correct banners with no trouble.

I'll make this into a post of my own. Have fun.