I'm late in this conversation & didn't read all the way through but yeah...I don't believe the issue in breeding merles is its not a natural color in Chis & was probably caused by mixing in w/another breed (that is how we got LC's after all!)...it's the fact that breeding is VERY VERY tricky & you can easily get a hidden merle. I am not interested in messing around with merle myself AT ALL though I do think they are pretty to look at. I'll just leave the tricky work to someone else who knows what they're doing!
I did see some merles at some local shows this past summer/fall. None ever did win but none really should have either. They weren't really typey at all & just not as good quality over all. Still was neat to see since I don't often see merle around.