There is no silver bullet. As model is a representation of the database and viewmodel is more closer to the interface, there is always some business logic needed to convert the model to view model and vice versa.
I usually have two methods in my view model class - SyncModel(ViewModel viewModel)
and SyncViewModel(Model model)
One more suggestion -
Model should not implement INotifyPropertyChanged. The view model should implement this as its bound to the user interface. Why does the model ever need to change? It represents whats in the db. You can refresh it but why do you need change notifications for the model?
Edit: MVVM: Binding to Model while keeping Model in sync with a server version
Hard reference. Each class having a reference to another, listens to property change event and updates itself accordingly.
Observer Pattern - Have an observer class, each class register itself with an observer, observer listens for any changes and updates all its subscribers.
There's also an event aggregator which might be useful.
If you want a deferred update, an isDirty property would be required. You know your application better, google for more articles and choose wisely.