1. Wondered last night during the opening dialogue scenes Merle had with Rick & Carol how much longer they were going to continue with his character. The "loyalty to prison gang/Daryl vs. loyalty to Woodbury" thing had been played out, and there was no resolution on either side. He couldn't go back to Woodbury, but he was likely never going to be trusted enough to be absorbed completely into the prison group.
2. That said, the ending still took me by surprise. I figured it was still a possible set-up using the arc in the books - Merle was wounded by the gunshot, taken hostage, trotted out by the Governor in front of the prison gang as a last-ditch effort to make a deal (or fracture the prison group), then executed, which would kick off the war. The whole scene where Daryl discovers Merle was one of the better scenes this season.
3. I have only read up through the first compendium, which basically ends just about where they are now - with the only thing left the assault on the prison. As noted above, the teasers for the finale suggest we get there pretty quickly. There are some loose ends that still need to be tied up, obviously - Andrea, Milton (remember...the Governor found out he was the one who torched the walker pits). I'll be interested to see if they manage to bring Tyrese over to the prison group.
I'm waiting for one, maybe two people to be killed off that we never expected, kind of like Dale was at the end of last season. I think Glen's fate - given some earlier spoilers in this forum - is a foregone conclusion.