IMO Ladder season won't end until the entire list is all level 99's.

As far as the merging goes, you'll keep your Ladder-Only items, but they can ONLY be found in Ladder (so none will drop in NonLadder). Those will sell for a LOT on Nonladder, that's why I'm farming in Ladder right now.

All I'm doing on ladder is farming items, getting runes, and Upgrading Items that would be good, in preparation for the end of the Ladder Season.