Hi Brant,
Both the "105" engine number and the lack of quotation marks around FAIRY on the crankcase are interesting, and require modification to "the theory". Maybe there were a batch of early Mk2 engines with these features?
It's hard to say when and where the first Mk2 engines were made/sold, particularly with the confusion around the hp ratings of the Fairy motors. But the timeline is very tight: Joe Barter's prototype Fee was describe in the Motor Cycle 30 Oct 1905, and Doug's company records have Light Motors Ltd incorporated December 14, 1905 at Orchard Street, Bristol, then at 180 Grays Inn Road, London on January 4, 1907, then the Fairy Motor Co. at 102 Westcombe Hill, Blackheath, S.E., by November 1907.
It's likely that most of the Fairys from 1906 (and hence "Bristol") were the 2 3/16 x 2 3/16 Mk1?
Re the Crest: in 1900 the small version of the engine for tricycles was 2 1/2 hp, but despite years of trawling early literature (I have two 1903 US-made motorcycles) I've not seen evidence for a Crest h.o. twin in a two-wheel motorcycle. It would be a cool machine.
Cheers
Leon