If Gray Merchant dies and is revived by something like Undying Evil, does it repeat it's loss of life when it is revived?
Question 1. Yes, he enters the battle field and thus his ability triggers.

Question 2: Yes, you use the devotion at the time the spell resolves. 

A ruling on Gray merchant of asphodel has this:


  If an activated ability or triggered ability has an effect that
  depends on your devotion to a color, you count the number of mana
  symbols of that color among the mana costs of permanents you control
  as the ability resolves. The permanent with that ability will be
  counted if it’s still on the battlefield at that time.