Hi Andy,
Thank you for sharing your analysis and thoughts on spatial smoothing. I agree with you that it would be better if smoothing can be done isotropically, and I will discuss the possibility of modifying 3dmerge with others about this. On the other hand, the anisotropy of smoothing kernel size can be countered during multiple comparison correction with AlphaSim with options -fwhmx, -fwhmy, and -fwhmz.
Gang