Automator/Applescript to Rename files when dropped in folder based on parent folder name

Question

When a file is dropped in a folder ( ParentFolder/Folder/File.pdf )
I want to rename the file to ParentFolder_Folder_01.pdf
    --Get folder
    --Get ParentFolder
    --Check for next available number and use it.
    If ParentFolder_Folder_01.pdf exists, try _02
I automator, I have chosen folder action
Added 'Get selected finder items'
I have attempted to modify another sript I found here to no avail.
on run {input, parameters}
    tell application "Finder"
        set theFolder to input as string
        set theNameOfFolder to name of folder theFolder
        set theFiles to every file in folder theFolder
        set theFolders to every folder in folder theFolder
        my ProcessFiles(theNameOfFolder, theFiles)
        my ProcessFolders(theFolders)
    end tell
end run
to ProcessFolders(theFolders)
    tell application "Finder"
        repeat with thisFolder in theFolders
            set theNameOfFolder to name of thisFolder
            set theFiles to every file in thisFolder
            set theFolders to every folder in thisFolder
            my ProcessFiles(theNameOfFolder, theFiles)
            my ProcessFolders(thisFolder)
        end repeat
    end tell
end ProcessFolders
to ProcessFiles(NameOfOuterFolder, theFiles)
    tell application "Finder"
        repeat with thisFile in theFiles
            set theSuffix to my grabSuffixOfFile(name of thisFile)
            set name of thisFile to NameOfOuterFolder & "_" & theSuffix
        end repeat
    end tell
end ProcessFiles
to grabSuffixOfFile(theFile)
    set text item delimiters to "_"
    return (text item 2 of theFile)
    set text item delimiters to ""
end grabSuffixOfFile

Answer 1

Normally it is a bad idea to do things with items that are in the attached folder (earlier OS versions will retrigger folder actions when an item is renamed, for example), and you don't need to use a Get Selected Finder Items action since the dropped items are already passed to your workflow (also note that the input items will be a list).
It looks like you are trying to use multiple passes to add on the folder names, but you will have less of a headache if you build the base name and just deal with the number suffix.  If I understood your naming scheme correctly, the following script should do the trick - it isn't very fast, but should be OK for a few items at a time.
on run {input, parameters} -- rename input Finder items (aliases) to name of containing folders
  set divider to "_" -- the divider character between name pieces
  set output to {} -- the result to pass on to the next action
  set counter to "01" -- start suffix at one
  repeat with anItem in the input -- step through each item in the input
  set anItem to contents of anItem -- dereference
  tell application "Finder" to if class of item anItem is document file then -- don't mess with folders or applications
  set {itemParent, itemExtension} to {container, name extension} of anItem
  if itemExtension is not "" then set itemExtension to "." & itemExtension
  set grandParentName to name of container of itemParent
  set parentName to name of itemParent
  set newName to grandParentName & divider & parentName & divider & counter
  set documentNames to my getExistingNames(itemParent)
  repeat while newName is in documentNames -- increment counter suffix as needed
                                        set counter to text -2 thru -1 of ("0" & (counter + 1))
  set newName to grandParentName & divider & parentName & divider & counter
  end repeat
  set name of anItem to (newName & itemExtension)
  set end of output to anItem -- alias still refers to the same file even after renaming
  end if
  end repeat
  return the output
end run
to getExistingNames(someFolder) -- get base document names (no extensions) from a folder
  set nameList to {}
  tell application "Finder" to repeat with aFile in (get document files of someFolder)
  set {fileName, fileExtension} to {name, name extension} of aFile
  if fileExtension is not "" then set fileExtension to "." & fileExtension
  set fileName to text 1 thru -((count fileExtension) + 1) of fileName -- just the name part
  set end of nameList to fileName
  end repeat
  return nameList
end getExistingNames