Did you also take out the Hymns? I'm really interested in how they work out in BitterStalker. I'm mostly playing the deck online right now since I don't want to play it with English cards. Online I'm trying to run it basically like Team America but with Bitterblossom instead of Tarmogoyf and some nice removal in the side. The list also plays Hymn To Tourach in place of Spellstutter Sprite. So far the changes didn't matter at all since I didn't draw any of the new cards. The sideboard changes were irrelevant because I didn't need any of the new inclusions. I'm giving Grim Lavamancer a try again, basically didn't play him in this deck for about a year now.
When I played Team America yesterday, I noticed a few things. It was awesome to be able to bring additional threats postboard. This helps against a lot of decks. Also, Hymn To Tourach is amazing against everything with blue. They really need their resources; one of my opponents sided out his Force Of Wills; his reasoning for this was that my Hymns were enough carddisadvantage for him. I'm thinking about including Go For The Throat, even though the card looks really ugly. But there are a lot of Tombstalkers running around right now, which Smother can't hit. Furthermore, Darkblast is another amazing card. I'm not too sure about it in this deck, since it doesn't help winning Goyf wars here, but it still gets rid of all the nasty utility creatures like Noble Hierarch, Dark Confidant, Grim Lavamander, Goblin Lackey and so on. Therefore I'm working on my stock list again. The maindeck will probably only be -1 Smother -1 Ghastly Demise, +1 Darkblast +1 Go For The Throat. For the sideboard, there's a lot more thinking going on, but I'm actually reconsidering Red Elemental Blast / Pyroblast. 4 Lightning Bolt, 2 Umezawa's Jitte, some number of Blasts, Tombstalkers and 3 Engineered Explosives should be enough to beat Merfolk reliably. This way I could drop the Firespouts for some Engineered Plagues. Firespout has been pretty underwhelming as of lately anyway.
Sooo, back to your list. I can imagine why you lose against Merfolk without red. It's pretty important against them. By the way, Merfolk is the deck I lost the most against, but this is partly due to the number of times I actually faced it and partly due to my awful draws against them. Having loads of removal and getting out an early threat is key here. You generally want to board out your Force Of Wills in this matchup. First of they're card disadvantage and after they get Ęther Vial going, it will be dead anyway. Plus, what do you expect Crucible to do?