Winchester, an Olympic venue?

I was rather intrigued by the flags outside the Cathedral. After the rather annoying failure to get tickets for any events I must admit to having lost interest in the Games. So I wondered if I had missed something; perhaps London was allowing the old capital of England to host an event. I don't think so, at least I can't find any mention of it on the websites. The only reference to the Cathedral and the Olympics is that we can "Watch the London 2012 Olympics and Paralympics live on a giant screen in the Cathedral Outer Close"; the screen will be in place from 27 July to 9 September.
I wondered why there were so many people around the Cathedral carrying picnic rugs and chairs. H.M.S. Pinafore by Gilbert and Sullivan is being performed tonight. I hope the weather holds for them.