[PyGame] UnboundLocalError

[BashBedlam]

For your knowledge, the variable passed was use before it was defined so I defined it on line 98.
On line 146 of the new version, gamedisplay.update() was changed to game_display.update ()
The variable obs_pic was set to default to car2.jpeg on line 33.
Lines 106 through 117 were indented to place them inside the for loop started at line 102.
Now, the call to game_loop () was put back into the crash function in order not to stop the game after a crash. In my first revision, I recommended that you replace that with some kind of menu or something instead of just automatically starting over, but you're the boss Here you go.

import random
import pygame
pygame.init()
gray= (119, 118, 110)
black=(0,0,0)
red=(255,0,0)
import time

display_width = 800
display_height = 600
game_displays = pygame.display.set_mode((display_width,display_height))
pygame.display.set_caption('CAR GAME')
clock=pygame.time.Clock()
car_image=pygame.image.load('Car_1.jpeg')
background_image=pygame.image.load('Background_1.jpeg')
yellow_strip=pygame.image.load('Yellow_strip.png')
strip=pygame.image.load('Strip.jpeg')
car_width=56
 
def obstacle(obs_startx,obs_starty,obs):
	if obs==0:
		obs_pic=pygame.image.load('car2.jpeg')
	elif obs==1:
		obs_pic=pygame.image.load('car3.jpeg')
	elif obs==2:
		obs_pic=pygame.image.load('car4.jpeg')
	elif obs==3:
		obs_pic=pygame.image.load('car5.jpeg')
	elif obs==4:
		obs_pic=pygame.image.load('car6.jpeg')
	elif obs==5:
		obs_pic=pygame.image.load('car7.jpeg')
	else : obs_pic=pygame.image.load('car2.jpeg')

	game_displays.blit(obs_pic,(obs_startx,obs_starty))
 
def score_system(passed,score):
	font=pygame.font.SysFont(None,25)
	text=font.render("Passed"+str(passed),True,black)
	score=font.render("Score"+str(score),True,red)
	game_displays.blit(text,(0,50))
	game_displays.blit(score,(0,30))
 
def text_objects(text,font):
	textsurface=font.render(text,True,black)
	return textsurface,textsurface.get_rect()
 
def message_display(text):
	largetext=pygame.font.Font("freesansbold.ttf",80)
	textsurf,textrect=text_objects(text,largetext)
	textrect.center=((display_width/2),(display_height/2))
	game_displays.blit(textsurf,textrect)
	pygame.display.update()
	time.sleep(1)
 
def crash():
	message_display("YOU CRASHED!!")
	time.sleep (2) 
	game_loop ()
 
def background():
	game_displays.blit(background_image,(0,0))
	game_displays.blit(background_image,(0,200))
	game_displays.blit(background_image,(0,400))
	game_displays.blit(background_image,(700,0))
	game_displays.blit(background_image,(700,200))
	game_displays.blit(background_image,(700,400))
	game_displays.blit(yellow_strip,(376,0))
	game_displays.blit(yellow_strip,(376,100))
	game_displays.blit(yellow_strip,(376,200))
	game_displays.blit(yellow_strip,(376,300))
	game_displays.blit(yellow_strip,(376,400))
	game_displays.blit(yellow_strip,(376,500))
	game_displays.blit(strip,(120,0))
	game_displays.blit(strip,(120,100))
	game_displays.blit(strip,(120,200))
	game_displays.blit(strip, (677,0))
	game_displays.blit(strip, (677,100))
	game_displays.blit(strip, (677,200))
 
def car(x,y):
	game_displays.blit(car_image,(x,y))#blit enters the image on the game screen
 
def game_loop():
	x=(display_width*0.47)
	y=(display_height*0.8)
	x_change=0
	obstacle_speed=9
	obs=0
	y_change=0
	obs_startx=random.randrange(200,(display_width-200))
	obs_starty=-750
	obs_width=56
	obs_height=125
	car_passed=0
	level=0
	score=0
	passed = 0
 
	bumped=False
	while not bumped:
		for event in pygame.event.get():
			if event .type==pygame.QUIT:
				pygame.quit()
				quit()
			if event.type==pygame.KEYDOWN:#keydown just means if some one presses a key
				if event.key==pygame.K_LEFT:
					x_change=-5
				if event.key==pygame.K_RIGHT:
					x_change=5
				if event.key==pygame.K_a:
					obstacle_speed+=2
				if event.key==pygame.K_b:
					obstacle_speed-=2
			if event.type==pygame.KEYUP:#key up just means if no key is pressed so it will not move as thenx_xhange=0
				if event.key==pygame.K_LEFT or event.key==pygame.K_RIGHT:
					x_change=0
 
		x+=x_change
		game_displays.fill(gray)
		background()
		obs_starty-=(obstacle_speed/4)
		obstacle(obs_startx,obs_starty,obs)
		obs_starty+=obstacle_speed
		car(x,y)
		score_system(passed,score)
 
		if x>680-car_width or x<110:
			crash()
		if x > display_width - (car_width + 110) or x < 110:
			crash()
			print ('Here')
		if obs_starty > display_height:
			obs_starty = 0 - obs_height
			obs_startx = random.randrange(170, (display_width - 170))
			obs = random.randrange(0,7)
			passed=passed+1
			score=passed*10
			if int(passed) % 10 == 0:
				level = level + 1
				obstacle_speed + 2
				largetext = pygame.font.Font("freesansbold.ttf", 80)
				textsurf, textrect = text_objects("LEVEL" + str(level), largetext)
				textrect.center = ((display_width / 2), (display_height / 2))
				game_displays.blit(textsurf, textrect)
				pygame.display.update()
				time.sleep(3)
 
		if y<obs_starty+obs_height:
			if x > obs_startx and x < obs_startx + obs_width or x+car_width > obs_startx and x+car_width < obs_startx+obs_width:
				crash()
 
		pygame.display.update()#update() is to make the display Surface actually appear on the user's monitor.
		#If we will delete the above line only a black screen will appear
		clock.tick(60)
 
game_loop()