God rest ye merry gentlemen, / Let nothing you dismay.
Suggesting that ye = you. Would be most odd if ye = the.

I'll go along with the pause between merry and gentlemen.
Nah. Put the pause before merry, not after. Thus, merry gentlemen is an appostive phrase for and following ye/you.

Edit: a google search for "God rest ye merry gentlemen" reveals that it appears usually with no comma at all; fairly often with a comma after merry (wow's reading); and once in a while with a comma before merry (my reading):
http://www.pdinfo.com/list/chrissng.htm[/.url], citing 1827
[url]www.geocities.com/stephen_crane_us/godrest.html
(story by Stephan Crane, 1899)
Occcasionally "you", but never "the", is substitituted for "ye".

http://ww.highlandpublishing.com/Highland_Records_%C4/Albums%20%C4/Highland_Records_204.html: Apparently the words were written first, their earliest appearance in the Roxburghe Collection III, about 1770. The original melody can be found in Christmas Carols Ancient and Modern, by William Sandys (London, 1833). The melody that we know, along with the current words, appear in Facetiae and Miscellanies, by William Hone, published in London in 1827. As James Fuld points out, the title can be interpreted to mean "God keep you, merry gentlemen" or "God keep you merry, gentlemen."