Dear Dr Aklujkar,

Cognisant as I am of your expertise, I must respectfully disagree. In the context of the Pratyabhijñā philosophy being expounded by Abhinavagupta here, the idea is that the body mind etc., which are clearly objects of awareness, lose their separate objectivity in this turyā state, becoming expressions of awareness itself (tadā bodha-svarūpīkṛtaṃ tad-rasānuviddham eva śūnyādi-dehāntam avabhāti, further on in the passage), not separate from it. So this is not the turyā of other schools (= samādhi), because a complete withdrawal from the objects of cognition is here called turyātīta. In the turyā state under discussion, it is specifically the objectivity of the objects of consciousness that falls away, not their appearance within consciousness -- but he specifies that the impressions (sa.mskāra) of objectivity remain.

With regard to your second point, the Rasa-ratna-samuccaya (5.11) citation (thank you for that!) I think shows that vedha can indeed mean transmute; so what we have in the Abhinavagupta passage is three stages in the process (in which the agent is ahambhāva or svātantryarūpa-bodha). The first is denoted by vidh-,  permeate, infuse, but also transmute; the second, abhini+viś, immerse completely (now dehādi have become like gold); the third, jīrṇa, in which all trace of objectivity (the sa.mskāras referred to above) are "worn away" or the gold is "digested" by the mercury in the metaphor. (This is now turyātīta-daśā). Thus the mercury preparation (siddha-rasa) changes the base metal to gold, then with prolonged exposure eats away that pure gold itself, since Abhinava wants no trace of objectivity left in this process. A nice (if surprising) metaphor, since the idea of pure gold triggers our rāga, and therefore must be dissolved, leaving only the dynamism of consciousness itself.

Torella (1994) supports my reading in his summary paraphrase of this passage:
"The objective realities with which the I had identified himself are themselves transformed on contact with the I . . . so that they continue to subsist, but as though they have ceased to be objects; they are compared to copper which on contact with mercury is transformed into gold. The state beyond the fourth state, in which . . . the differentiation is now completely dissolved, the idantā dispelled; remaining within the terms of the simile suggested by Abh., even the gold into which the various levels of subjectivity have been transformed - from the body to the void - as it is increasingly permeated by the mercury wears away and finally dissolves, these realities only surviving in the residual form of samskāra."  but later he seemingly changed his understanding of the passage, writing "This experience, which corresponds to the
fourth state, can be extended further, until it flows into the state beyond the fourth, where the components of limitation, including sa.mskāra, are totally dissolved and incorporated in the I."

This last confusion hinges on the interpretation of the phrase sa drutarasa iva ābhāti kevalaṃ tat-saṃskāraḥ.

I am taking tat-sa.mskāra to refer to the sole impression of awakened consciousness itself (drutarasa = cidrasa).

very best,
CW