Mark, from the number of questions that you have about this project, I feel that it's beyond your level of expertise at this time. I'm not saying that you can't do it but you might want to tackle it one section at a time, gaining experience at each step. I've never laid patio block in a bed of mortar unless it I was setting it on a concrete slab. Mortar and grout come in a bag so you don't have to worry about ratios. The drainage ditch can either be paved, keeping the same contour or 4 inch pipe can be installed and the yard leveled. I'm not sure about the retaining wall because I don't know how steep the slope is but any retaining wall that extends above grade will trap water on the patio. More information on laying stone can be found at www.lowes.com, go to the bottom of the page, click on "how to", go to making walkways. Wish I knew how to make that a clickable link. Maybe JayJ can do it or educate me on how to do it. Good luck.