I've read about the "Merlin" version but never seen. According to wiki it was the Devil's Gift director himself who edited the movie as a segment for his Merlin feature. I also read the Merlin version of Devil's Gift is missing the original final six minutes ending, which is kind of dark and downbeat.
Other than that I was stunned they tried to market The Devil's Gift as a Gremlins clone when it was first released to VHS