Python 'if' and 'while' conditions not working

I am writing a simple Python program. It's supposed to read two sorted lists from tab-delineated file and merge them into a single sorted list. The algorithm isn't too tough but Python seems to be ignoring the conditions in my loops and if statements!

Here's my input file:

1   2   3   10
7   9   100

Here's the relevant bit of code with print commands for debugging:

print 'list1 len =' + str(len(list1)) + ', list2 len = ' + str(len(list2))
while (i < len(list1)) or (j < len(list2)):
    print 'i = ' + str(i)
    print 'list1[i] = ' + str(list1[i])
    if (list1[i] < list2[j]):
        print str(list1[i]) + ' < ' + str(list2[j])
        output.append(list1[i])
        i += 1
    else:
        output.append(list2[j])
        j += 1

The program reads in the correct values but seems to always read the if-condition as true at every iteration.

list1 len =4, list2 len = 3
i = 0
list1[i] = 1
1 < 7
i = 1
list1[i] = 2
2 < 7
i = 2
list1[i] = 3
3 < 7
i = 3
list1[i] = 10
10 < 7
i = 4
Traceback (most recent call last):
  File "q2.py", line 22, in <module>
     print 'list1[i] = ' + str(list1[i])
IndexError: list index out of range

Not only is the if-statement not working (10 < 7 isn't right!), it's also failing at the while loop, since 'i' gets to 4, the size of list1. What is happening?!

Thanks!!!!