Posted 18 February 2012 - 03:17 PM
I am aware of cryptic merles, but in the working dog population merles are rare enough, which means cryptic merles are even rarer. The probability of a merle-to-merle breeding is pretty low. I don't think that equates to a situation where you breed B&W to B&W and get a red dog, or a blue. In other words, merles don't generally just pop up in a litter seemingly out of the blue (like reds or dilutes can), and if one did, then you'd figure out pretty fast that one of the parents was a cryptic merle.
The confusion between merle and heavily ticked is very common. I have owned both a blue merle and a very heavily ticked dog and there are clear differences in color pattern, but I have often heard heavily ticked dogs referred to as merles, erroneously. (The ticking genes affects the color that appears in the white areas of a dog, whereas the merle gene acts to dilute the color of the colored parts of a dog <--simplistic explanation.)
As for lilac merle and the like, if it's a special color you can bet someone will want it and someone else will be happy to supply the demand. Ick. If enough are produced, I imagine we will find out if merle + dilute also results in some sort of health problems (because merle acts as a dilution gene but affects only some of the coat vs. dilute, which dilutes uniformly; imagine the confusion about what it means to be a double dilute then!).
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