Glad to hear you got it worked out. I'll add some additional details in case others are having issues, too.
The FNAME and LNAME tags will pull information from the 'name' in the 'to' parameter, if you've provided a name but haven't provided recipient-specific merge values. Basically the first word is used for FNAME and the last word for LNAME, so you may see that FNAME and LNAME work, but others don't.
There's no place to pre-define merge tags for Mandrill - the main consideration is to avoid punctuation in the merge names. For example, colons are used in MailChimp and have a specific meaning, and since the merge language draws from MailChimp, the colons result in behavior that may be unexpected. So, avoid using something like *|MERGE:TAG|*.
--Kaitlin