Whenever you see this error:
Warning: include(Mage/Googlecheckout/Block/Adminhtml/Shipping/Merchant.php): failed to open stream: No such file or directory in app/code/local/Varien/Autoload.php on line 98
It only means that in app/code/core/Mage/GoogleCheckout/etc/config.xml, the block was not declared. So you just have to add this inside the global node:
Did that solve the issue? Please leave your comment. Thanks!
P.S. If you want the other way of solving this issue (which is the more appropriate one), just let me know.