Hi,
Ok now that we have moved to the schematic, there are a number of mistakes in the connections. As soon as they are fixed this should work just fine, so you are getting very close now
First, the connections to U2 look like the VCC connections might be shorting all the input pins to VCC. Move U2 over to the right a little and draw all the connections again, making sure to leave room between the pin ends and the VCC lines so they dont touch. unless of course they really have to go to VCC, but maybe a 5 input gate would be better (read on).
Next, for BIT 3, all the inputs go to VCC so how could that possibly work that way. You have to go over that and correct them.
Also, the output Y0 of the 74LS138 goes to VCC ??
An output never gets tied to VCC, but it may be left open. Only the inputs get tied to VCC when not used, or possibly ground depending on the logic function, but never the outputs.
So go over those connections and correct them, then maybe double check all the connections and note that for BIT 2 there is only one 'high' ever needed and that is for only one state, so the NAND gate for that bit only needs one input or else use an inverter. Also note that one of the other bits requires a 3 input NAND gate, so maybe you can find a dual 5 input NAND gate to use one section for BIT 0 and the other for the other BIT.