Lotsa houghts here
Here's what I think I know:
1. Mercury will dissolve the lead, and thus will permeate the projectile making it appear very silvery and shiney. This of course will touch the powder, and I dont know if it will deactivate it.
2. According to gunwriter's webpages, a mercury filled hp was used to assassinate the russian governor who initiated gun control in finland. Supposedly did increase expansion and sent lots of little globules of mercury perforating his guts. Died not of mercury poisoning, but of peritonitis/sepsis a few days later. But they were used, and did apparently 'work'.
3. Lots of liquids don't compress, as mentioned such as water, also the fluid in your brake lines, etc. the same gunwriter's webpages describes vaseline in 22LR hollowpoints.
I can only verify these things as far as this thread. Never tried any of it myself.
C-