OK think I got it, was actually 2 problems dealing with the merged cells.
Replace the original 'copy to scratchpad section of the first macro with this and it should fix things up.
Code:
'copy to scratchpad
For Each ws In Worksheets
If ws.Name <> "Master" And ws.Name <> "ScratchPad" Then
pasterow = ws2.Cells(Rows.Count, 2).End(xlUp).Row + 1
If pasterow = 2 Then pasterow = 1
With ws
'copy data to scratchpad
lr = ws.Cells(Rows.Count, 2).End(xlUp).Row
.Range("A2:I" & lr).Copy ws2.Range("A" & pasterow)
ws2.Columns.AutoFit
End With
End If
Next ws