If you change
maxwidgets='2'
to
maxwidgets='3'
(or some other larger number)
then you should be able to go into Blogger's layout tab, use the Add a Gadget feature, choose an HTML/javascript gadget from the list, and then paste the HTML for your iframe statemenet into the Content field.
Of course that won't help if your readers cannot display flash-based content - but there is nothing you can do about this.