Merging two sorted lists

merge.py

def merge(lst1, lst2):
    sorted = []
    iter1 = iter(lst1)
    iter2 = iter(lst2)
    l1_done = False
    l2_done = False
    val1 = lst1.next()
    val2 = lst2.next()
    while True:
        if val1 < val2 or l2_done:
            sorted.append(val1)
            try:
                val1 = lst1.next()
            except StopIteration:
                l1_done = True
        else:
            sorted.append(val2)
            try:
                val2 = lst2.next()
            except StopIteration:
                l2_done = True
        if l1_done and l2_done:
            return sorted