Do the wall first.

Wall first.
The excavation from your first course of stone retainment will be below your flagstone level, thus making the wall the first structrual element that should be built.
enjoy the process. there are few things in life that can give such joy as hand building a beautiful dry stone wall.

+1 to the satisfaction of wall building! (I have been working on one all summer long and am having a ball.) Laying natural flagstone is pretty fun too. Please share photos when you are done so we can give you some virtual pats on the back.

Thanx for the help, Im guessing for laying the foundation bed for the retaining wall, just dig down a bit more into the excavation for walkway since both the walkway and wall are laid upon crushed stone and sand??