5# goex cannon and 20# 1f "skirmish" would be $213.50 at Powder, inc (including shipping).
What are you using as projectiles (how heavy)? A half ounce sounds reasonable for starting, but only at a decent place to shoot (couple hundred yard range). I don't think it will go that far, but less is better when uncertain. With a chamber that size you could go a bit less and still get decent ignition if you wanted to be on the safe side for the first shot. Once you light the fuse, you can't stop it, and you are responsible for where it goes.
8 ounces, especially of 1F, for a blank seems a bit stiff to me, but the Missouri Cannon Works more than likely has enough practical data to know what is safe in that design. 1F for blanks is definitly the way to go, as a mortar subchamber is really short and there isn't a whole lotta time to wait for a slow burning powder(Cannon Grade) to burn. Even 2F may be OK for blanks. "The more complete cannoneer" even casually and evasively mentions 2F for blanks, but loading suggestions with 2F are not clear. That would be sort of a slightly scarey "your own your own" way to go unless Missouri Cannon Works has tried 2F and can recommend it.
Mortars won't give you as big of a boom as a cannon so if it isn't ear shattering, it's not cuz you didnt put in enough powder but that is is the way it is supposed to be.
How deep is your powder chamber? I am thinking that 8 ounces won't fit in there.
If 8 ounces does fit in there, you will definilty want to be ordering powder in 25# cases