Just finished going through all the mercenaries and can confirm the fixes, however Heavy isn't going down without a fight.
https://steamhost.cn/steamcommunity_com/sharedfiles/filedetails/?id=1288000469
The texture bugs on the collar and his left wrist are perfectly fine along with any other things, but the right wrist on both standard and hardware morph models come out like this. I wanna guess that it's related to the Purity Fist bodygroup, but I have no idea how or why.

Either way, my trick from before with putting the main SMD file and the VTA file through Blender still help to fix the issue.

Right, yes, I completely forgot about line zero. Maybe try adding a \ at the end so it looks like this:

$cdmaterials "prop\MKX_Reptile_Alternate\"

Could be. I'm not familiar at all with DMX, but try turning "$body" into "$model" now.

The $model line isn't finished, you either need a closing bracket or need to remove the first one.

Try changing "$model" to "$modelname".

ERROR: VVD file not found.

This is your error. When decompiling a model you need to make sure you have every file that belongs with the model. With Bonk for example, you need all six files:

.dx80
.dx90
.mdl
.phy
.sw.vtx
.vvd

With SFM I think they typically use three of four of these listed, but basically you'll wanna make sure you have every file together in the same place before decompiling.

http://www.7-zip.org/download.html

I think in the Compiler tab you can change the locations with the "Set Up Games" option.

It's complaining about line seven in your QC. Possibly a missing bracket. What does the beginning of your QC look like?

You need 7-Zip to unpack it.[www.7-zip.org]