This sounds like a dictionary - first create a dictionary
state_abbrs = {}
for name in range(state_sheet.nrows): #a sheet with state names in col 0, state abrevs in col 1
state_name = state_sheet.cell_value(name, colx=0)
state_abrev = state_sheet.cell_value(name, colx=1)
state_abbrs[state_name.lower()] = state_abbr
Then use it:
for row in range(input_sheet.nrows):
state = input_sheet.cell_value(row, colx=1) #state names are in col 1
Value1 = input_sheet.cell_value(row, colx=2) #data being left unchanged, just copied to output sheet
Value2 = input_sheet.cell_value(row, colx=3)
Value3 = input_sheet.cell_value(row, colx=4)
output_sheet.write(row, 0, state_abbrs.get(state.lower(), '')
output_sheet.write(row, 1, Value1)
output_sheet.write(row, 2, Value2)
output_sheet.write(row, 3, Value3)