I agree with Blind. The Merc II gets it's memory clogged with too many transponders and channels, and this sort of behavior is the result. I've also seen memory clog affect USALS behavior. Simply not enough available memory to do the job, so you have to clear it out.
An additional precaution you can take, is to use the Channel editor to remove all the transponders from the satellites that you don't use. Save THAT channel list as your default, and after you load factory defaults, then load your custom list, which will give you more available free memory from the start.
I agree with Brent. Ever since the Ultra, Fortec has had a bug with respect to strange things happening whenever you exceed not only the maximum number of transponders, but the maximum number of other items too, like active transponders, channels, and some other things. Instead of fixing the problems, Fortec just added more memory, so that it takes longer before the symptoms appear.
With the ULTRA, however you could always determine if this was the problem, because it had has a channel editor that gives all this information, ie it shows how close you are to each limit, but the Mercury has only a marginally functional editor. I don't think it had this info, but I might be wrong.
But anyway, yes, after you get it working again, I would FIRST delete all unused satellites, before you start to program things again, then routinely delete all unused transpondersand unused channels to keep the receiver below the limits. However, and this is a big however, if you are using diseqC-1.2 to move your dish, if you delete satellites, it is very likely to mess up a lot of your sat positions due to the BUG in the diseqC-1.2 function, so I would only delete satellites BEFORE you start programming in any diseqC-1.2 positions.
You might be able to get the receiver back to operation without doing a complete factory reset, by going back to an older working channel data file, then deleting unused stuff, but whenever things like this happened to me, I'd just do a factory reset and start over. I have a Fortec Lifetime, Fortec Ultra, and Fortec Mercury, and the Ultra had more bugs than the Lifetime, and the Mercury has more bugs than both the prior receivers put together. With that trend, I don't think I'd ever consider another Fortec receiver.
I had the same problem with my Merc..I done everything I could to get it to scan again..no luck..so I sent it to the tech at Fortec Canada.He tried to repair it and then told me it was a dead unit..They sent me a brand new Mercury shipped and no charges..Great support from Fortec Canada.