Seems to me like the merge part of the algorithm is a bit overkill :

Generate a uuid for each item on your list upon creation ( on the client side), then sync the actions on the item ( create, update, delete). There's never the need to "merge" on the server. All you need is to create a serial "history" of all the actions on the server side, and replay them in that order on clients. You do that by locking on the DB when a client wants to send new actions.

PS : i'm currently coding exactly that. So it's more a way for me to share my ideas rather than criticize.