Hi Kevin,
Just line up the front of your Mercury engine with the front of the turbine shown on the plan and this will give you the optimal placement of the engine.
Your concern was that the engine does not sit far back enough into the SS duct and that you will cook the bypass, but this is not the case. The bypass is designed to move the airflow around the engine and "hug" the exhaust nozzle at the back of the engine creating a cooling effect.
We developed the larger duct system utilizing the TJT3000 and even at the hottest points of the engine, bypass and SS duct temperatures were only 45 degrees celsius!! The Mercury is smaller in diameter than the other engines (TJT3000/Simjet1700/2300/JetcatP80) that the duct system is also suitable for, so there is a larger airgap between the Mercury and the bypass - meaning the Merc will run slightly hotter than the larger diameter engines, but still not enough to even come close to cooking the bypass.
We do not use bell mouths, although they work, they have a loss of dynamic performance. Besides extensive testing of the larger duct system we also created our smaller duct system using the Simjet 1200 and we had ZERO loss of performance with our enclosed design (We were able to obtain 13.5lbs thrust in our test Sabre and the engine test-run report from Simjet states 13.5lbs).

As always, if you require assistance please feel welcome to contact us at anytime,

Best Regards,
Tony Roessen
Trim Aircraft – Australia