Originally Posted by PixelLord
This happened to me also. There were at least two different attacks going on at the same time. After repelling the attacks, the town remained in attack mode. After searching for a town attacker for a while, I finally gave up and went into the dungeons to complete quests (attack sound effects running the entire time). While I was in the dungeon, a real attack happened (I had no way to know this, of course) and I lost the town.
Happened to be as well but I'm playing version 1.0. Town got attacked and I defeated the attackers, but the sound/icon stayed regardless. I had to eventually just start a new town, which was unfortunate.