If you really want help with this problem, put together a small test suite that gives some inputs and some sample outputs (that you tabulate by hand) and wait for someone to produce a MATLAB function to do what you want.
This is an interesting problem. Acting as an administrator, I cleaned it up and added some tests.
Remove the two elements next to NaN value
Construct an index vector from two input vectors in vectorized fashion
Generate a vector like 1,2,2,3,3,3,4,4,4,4
MATCH THE STRINGS (2 CHAR) very easy
Create an n-by-n null matrix and fill with ones certain positions
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