How soon can new elections be held?
I think what went wrong for you was that Germans still viewed Schroder very favorably.
If you can have new elections in 1 year, Merkel could go to the electorate like Koizumi did in Japan and say "Germany needs to be reformed but I cannot reform Germany in a Grand Coalition. Therefore I ask for Parliament to dissolve so that new elections can be held".
If there are new elections within one year, Merkel won't have to deal with Schroder's charisma and she will be running with the authority as Chancellor.
And the Left Party may dissolve within one year now that Lafontaine has screwed everything up for all the major parties.
If Linke did not merge together, Merkel would have a Black Yellow Coalition because the two parties making up linke would not have gotten over 5% neccasary to be represented in the Bundestag. Or the Left Party may simply lose popularity.
I think the new government - whatever it will be (two possibilities now today: Black-Yellow-Green or Grand Coalition) won´t last longer than 1 1/2 years.