Something has always bothered me about Season 1 of the show.
Merle obviously couldn't survive long with half his arm cut off. He'd bleed out and die. So my theory is during the events of season 1, The Governor, Milton (Milton says he knows him before the apocalypse), Martinez (cus why not), and some other randoms were in Atlanta. After Rick, Glenn, Morales, etc leave the city for the first time, The Gov, etc find Merle. Milton patches him up since as a kinda scientist he probably has some medical training. So then the group finds the vatos gang. They decide to use their base and since xdxd Gov is insane he orders his men to kill all the gang members (which would explain why some of the dead vatos members in the deleted scene looked like they've been killed by humans). During the attack the random vatos member that was played by the same actor as Shumpert begs to spared and joins the Governor (basically it's revealed that guy was Shumpert). After they kill most of the vatos members the Gov and everyone realize that the base can't be used anymore because zombies have broken in. So they all leave and then we get the season 2 deleted scene that shows all the dead vatos members.
If you liked the theory and have your own theory about Merle's survival, leave them below in the comments.