Rather than using ILMerge to combine the DLR and IronRuby since the source to both is available and you could just compile them into the same dll which would be a lot easier.
The thing I'd be careful about is that IronRuby is still alpha and it would be incredibly risky to run a production service using it. It's only in the last 6 months or so that the IronRuby releases have started getting packaged up prior to which it was do it yourself builds from svn. In the 18 months or so I have been using IronRuby the interfaces and even assembly names changed regularly. I would expect things to be stabilisng now.
I have an experimental server running that utilises a slightly older version of IronRuby and that version has a significant memory leak. I worked around it by automatically restarting the service every 24 hours. Things have probably improved since then.
I don't know about the legal side of things but it's probably a similar approach to Siverlight where the beta licenses explicilty forbid commerical applications and permitted only development ones. Once SL was formally release the license changed to allow commerical products to be built on top of it.
IronPython on the other hand is production ready and I have had good experiences using it on a production service for the last two years.