The fact that God's gift of salvation is unmerited does not by necessity mean it is unconditional. Those are two separate things. Unmerited means it can't be earned, and Scripture clearly teaches that fact. Unconditional means that it can't be refused, but that is not taught in Scripture. Mark 16:16 clearly shows that disbelief will cause one to refuse God's gift of salvation. By obeying the Lord and doing as we have been taught, we are not meriting salvation, we are just meeting the conditions for receipt of that wonderful gift.
I would suggest all men start out in an unbelieving state-like a light switch in the Off position; not in an in-between state that one can accept or refuse the scripture. I would call your attention to John 8, one scripture among many that supports this position.
Therefore I said to you that you will die in your sins; for unless you believe that I am He, you will die in your sins. John 8:24
Man must believe in our Lord Jesus as the Messiah or they will die in their sins. I think this is consistent with Mark 16:16 which states:
He who has believed and has been baptized shall be saved; but he who has disbelieved shall be condemned.
It is not a matter of man being in a neutral position deciding to believe or disbelieve. Man already disbelieves. It is a matter that one must believe.
As for the following: By obeying the Lord and doing as we have been taught, we are not meriting salvation, we are just meeting the conditions for receipt of that wonderful gift. Im sure we both would agree that any works we have before the Lord is as filthy rags. Our salvation is assured only through the works of Christ and it is our duty to follow His example through His power and strength by submitting to the Holy Spirit.