Oh I just saw your post... A small block will fit in a 49-54 Merc or Ford. I bet you can even get a big block in one. I never owned a Mercury but have looked at plenty of them of that year. Basically 305, 302 and 327 are around same size. I would say go with a Ford motor though. I am more of a Chevy guy but I like to keep things Ford with Ford and Chevy with Chevy. I say look into a 302 or 351W.
Good luck!