Index out of range question

So I have this really large function for a battleships game I'm creating, and currently it's coming up with an index out of range error for one section, but when I use the same format for assigning a value to another variable it's fine.

public bool SelectAIMove(string[] hits)
        {
            int randomX = 0;
            int randomY = 0;
            int randomDirection;

            for (int index5 = 0; index5 < hits.Length; index5++)
            {
                Console.Write(hits[index5] + " ");
            }

            string move;

            if (hits[0] == "" || hits[0] == null)
            {
                do
                {
                    randomX = random.Next(0, 9);
                    randomY = random.Next(0, 9);
                }
                while (playerBoard[randomX, randomY] == "x");
            }
            else
            {
                //Direction: 0 = Right; 1 = Left; 2 = Up; 3 = Down;
                bool flag;

                do
                {
                    flag = false;
                    int hitsX = 0;
                    int hitsY = 0;

                    for (int index3 = 0; index3 < hits.Length; index3++)
                    {
                        if (hits[index3] != null || hits[index3] != "")
                        {
                            for (int index4 = 0; index4 < letters.Length; index4++)
                            {
                                if (letters[index4] == hits[index3][0].ToString())
                                {
                                    hitsX = index4;
                                }
                            }

                            if (hits[index3].Length == 3)
                            {
                                hitsY = (int.Parse(hits[index3][1].ToString() + hits[index3][2].ToString())) - 1;
                            }
                            else
                            {
                                hitsY = (int.Parse(hits[index3][1].ToString())) - 1;
                            }
                        }
                    }

                    randomDirection = random.Next(0, 4);

                    if (randomDirection == 0)
                    {
                        randomX = hitsX;
                        randomY = hitsY + 1;
                    }
                    else if (randomDirection == 1)
                    {
                        randomX = hitsX;
                        randomY = hitsY - 1;
                    }
                    else if (randomDirection == 2)
                    {
                        randomX = hitsX - 1;
                        randomY = hitsY;
                    }
                    else if (randomDirection == 3)
                    {
                        randomX = hitsX + 1;
                        randomY = hitsY;
                    }

                    flag = AICheckForOutOfBoundsOrEmptySpace(randomX, randomY);
                }
                while (flag == true);
            }

            move = (letters[randomX] + (randomY + 1));

            for (int x = 0; x < shipsLetters.Length; x++)
            {
                if (playerBoard[randomX, randomY] == shipsLetters[x])
                {
                    playerBoard[randomX, randomY] = "x";
                    Console.WriteLine(move + " - HIT");

                    for (int y = 0; y < AIHits.Length; y++)
                    {
                        if ((y != 0 && AIHits[y - 1] == null) || (AIHits[y] == "") || (y == 0 && AIHits[y] == null))
                        {
                            AIHits[y] = move;
                            break;
                        }
                    }

                    for (int index = 0; index < boardHeight; index++)
                    {
                        for (int index2 = 0; index2 < boardWidth; index2++)
                        {
                            if (playerBoard[index, index2] == shipsLetters[x])
                            {
                                goto Finish;
                            }
                        }
                    }

                    Console.WriteLine("I've sunk your " + shipNames[x]);
                    Array.Clear(AIHits, 0, AIHits.Length);

                Finish:
                    Console.WriteLine();
                    return true;
                }
            }
            playerBoard[randomX, randomY] = "x";
            Console.WriteLine(move + " - MISS");
            return false;
        }

That's the whole function, the bit in particular that's frustrating me is:

for (int index3 = 0; index3 < hits.Length; index3++)
                    {
                        if (hits[index3] != null || hits[index3] != "")
                        {
                            for (int index4 = 0; index4 < letters.Length; index4++)
                            {
                                if (letters[index4] == hits[index3][0].ToString())
                                {
                                    hitsX = index4;
                                }
                            }

                            if (hits[index3].Length == 3)
                            {
                                hitsY = (int.Parse(hits[index3][1].ToString() + hits[index3][2].ToString())) - 1;
                            }
                            else
                            {
                                hitsY = (int.Parse(hits[index3][1].ToString())) - 1;
                            }
                        }
                    }

Even more specifically, these bits:

for (int index4 = 0; index4 < letters.Length; index4++)
                            {
                                if (letters[index4] == hits[index3][0].ToString())
                                {
                                    hitsX = index4;
                                }
                            }

                            if (hits[index3].Length == 3)
                            {
                                hitsY = (int.Parse(hits[index3][1].ToString() + hits[index3][2].ToString())) - 1;
                            }
                            else
                            {
                                hitsY = (int.Parse(hits[index3][1].ToString())) - 1;
                            }

I've no idea why the bottom two work.

The type of data inserted into "hits[]" is stuff like "A4", "B10". Stuff like that, yet hits[index3][0] won't work for me, claiming it's out of range, but hits[index3][1] works, I'm really frustrated by it.

Can anyone help me?