trying to merge two seprate ruiles

You might be making this harder than it needs to be. You can simply associate two iRules with the same virtual.

If you still need to merge your iRules, then the problem you're running into is that you're mismatching your "when" statements. Syntacticly, you could do:

 
 when RULE_INIT { 
   set ::key [AES::key 128] 
 } 
 when HTTP_REQUEST { 
    First rule 
   set encrypted [HTTP::cookie "secure_cookie"] 
   HTTP::cookie remove "secure_cookie" 
   set decrypted [AES::decrypt $::key [b64decode $encrypted]] 
   HTTP::cookie insert name "secure_cookie" value $decrypted 
    Second rule 
   if { [HTTP::uri] starts_with "/dswsbobje"}{ 
     persist uie [SSL::sessionid] 1500 
     pool biz-objects_209.34.86.25_7080 
   } elseif { [HTTP::uri] starts_with "/biod"}{ 
     persist uie [SSL::sessionid] 1500 
     pool na.crystalreports.com_biod_209.34.86.25_9080 
   } else { 
     pool biz_objects_209.34.86.25_8080 
     persist cookie insert 
   } 
 } 
 when HTTP_RESPONSE { 
   set decrypted [HTTP::cookie "secure_cookie"] 
   HTTP::cookie remove "secure_cookie" 
   set encrypted [b64encode [AES::encrypt $::key $decrypted]] 
   HTTP::header insert "Set-Cookie" "secure_cookie=$encrypted; Version=1; Secure; HttpOnly" 
 }  
 

but that's just a syntatic merge. You should check the business logic to make sure it still does what you want.