Mark,
Any trouble I've encountered with Forge's merging process did stem from odd Terminal text code. I recommend you simply delete the contents of the offending TXX.Levelnamehere file, and replace it with one from another, less troublesome one. Make sure to modify the headers for the level, or just delete the Terminal text file file entirely af you make a backup. Forge will think that level is a "net level" or some such during the Merge process.
After the file is merged, use HEX! to paste the offending level's terminals in, and save.
This is actually how I do all WMaiD's terminals, as I ran into this problem twice during early development. It must have something to do with an bad tag in the hardcoded style term file.
-Blayne