It sounds like it should be working to me. How do you know that it's
"out of water"? Where does the water go? Your system should have an
automatic fill valve, and if it were truly out of water, the pressure
gauge would not read 12 psi.
Does this boiler only heat these two rooms, or does it heat other
areas too, and are those areas OK? (it's hard to tell from your message)
Here's two likely possibilities. One is that your system is air
locked. I know you bled the air out of the lines, but there's right and
wrong ways to bleed lines. Maybe these two rooms are on their own zone,
so while you took care of the rest of the system, you might have not
handled this particular set of pipes.
It could also be the circulating pump itself. Maybe the impellor is
brokes, or maybe the motor coupling is loose. It might look like the
pump is functioning, when it really isn't.
The reason I suggest these is because it sounds like your boiler is
working. If it really were running out of water, that water should be
showing up somewhere.