I just watched the clip of Agent Smith doing that to the Oracle. I think they did it in a full 3d program. However one thing I did notice about that scene is that those clips with the liquid in them are very short, about one second each. I think if you took that and made your clips with Mr. Mercury very quick, you could pull it off. You’d definitly have to play around with it a lot. Mr. Mercury doesn’t have any control over the shape of the liquid, it’s like a simple particle system where the liquid just shoots out or appears. I’d give it a try with a quick mask and see if it’s at least decent before tweaking it a lot to see if I can get it to look good.