That doesn't work. If the creature doesn't have Islandwalk when the Merfolk Assassin's ability resolves, I'm pretty sure the ability is countered because it has an illegal target. I'm thinking the requisite combo here is Merfolk Assassin, Fishliver Oil, Skull of Orm. That's the simplest way to replicate the old Merfolk Assassin + War Barge combo. Let's see here...how to make this a board sweeper now.
You need five mana to activate the Skull of Orm and one mana to cast the Fishliver Oil. You can get that from two Gilded Lotus. You also need to be able to untap both of the Loti, the Skull, and the Assassin. So...
Fishliver Oil
Merfolk Assassin
Skull of Orm
2 Gilded Lotus
1 Imagecrafter
4 Aphetto Alchemist
Faces of the Past
You generate six blue mana with the Loti. Cast Fishliver Oil on the creature to be destroyed. Make that creature a Wizard with Imagecrafter. Untap the Loti with two of the Alchemists. Destroy the creature with Merfolk Assassin. Faces of the Past triggers, untapping the Alchemists and the Imagecrafter. Use the remaining five mana to activate Skull of Orm to retrieve Fishliver Oil. Untap Merfolk Assassin and Skull of Orm with two of the Alchemists. Repeat.