Well, you have a while loop that runs if x or y are within a certain range. Within that loop, you never modify x or y, so in theory, once in the loop it would never exit, since the loop condition never changes. Instead, you've created two new variables in the loop newx and newy that you never use again. That's one of the bug. Simple fix is to update x and y instead of creating newx and newy.
The reason your loop does not run for ever is that you immediately terminate the loop when one of the neighbouring pixel is 1. You're just lucky that none of the pixels are completely isolated otherwise you'd have encountered a forever running loop. I assume you actually want the opposite of what you've coded in that you want the loop to continue if there is a neighbour and exit if there is none, so actually your break statement should be within a final else that you'd hit if no neighbour is found.
Note that the conditional statement for your while loop is also wrong. You never check for an upper x.
Finally, note that you use x to denote rows of your image and y to denote columns. This is contrary to normal convention, x is normally columns and y rows.
