I've got over 20,000 digital game camera pictures and I can't find any evidence that the flash spooks deer. I have many pictures of deer that have hung around and had several flash pictures taken of them. I've also watched deer when the camera flashed and they didn't react or just looked at the camera.

This being said, I can't say that it is impossible that certain deer could be spooked. We had a dog once that was afraid of lightning and we could scare here with a flashlight.

I'm not too sure about putting something over the flash. If the flash on the Xtreme 3 is as poor as their first two models you likely won't light up much at all, but it wouldn't hurt to give it a try.