So I've been really trying to get past my AA lately and push myself into conversations.The problem I have is that I've really been trying to hold true to the 3 second rule but the problem is my mind keeps blanking when I try to think of something to say.

I want to go up and just say "hi" but I keep immediately realizing I don't have anything to say afterward. I've been trying to make observations about whats going on (rarely if ever works) and thinking about why I want to approach the person (Usually to just get past AA or get practice starting conversations. AA is a fairly important problem that I experience with both genders so for now I try talking to anyone).

If I get talked to rudely or flat out blown out I never have problems not letting it get to me but getting someone's attention, saying "hi, how's it going?" and then not being able to it follow with any conversation would be strange. I could also do what I've been doing with something like asking directions but I still blank out and I'm not able to extend the conversation into something more personal. I'm usually really social around my friends too and this is definitely frustrating me.

Anyone else had this problem or have any suggestions?

Take a look at these videos: youtube -> user -> Sashathepua
He's very natural and inspiring, this should give u an idea on how to approach without your mind blanking. I had that feeling too, watched pretty much all of his approaches and realized that there's actually nothing wrong with telling a girl you wanted to say hi because you thought she was good-looking or whatever.

hey Mazufigo
u might try this:
set a goal of, say 25 "test"approaches.
walk the shopping mall and just ask a lady u would want to bed where the post office is or whatever. this just for the sole purpose of becoming at ease around babes.
just the notion of it being just a test will lower ur anxiety level.
and after 25 of these encounters u will notice one wonderful thing... u will feel more at ease approaching. and this will unblock your ability to make conversation.
immediate rewards can push u over the threshold like a pint of beer or a donut or whatever. good luck and enjoy the adventure.