Apparently 2.0.4 is too new for the 4G.
You're going to have to let Google be your friend and search the web for firmware 1.0.4. Once you find it, follow these instructions, but understand I take no responsibility for what happens to your device...
To downgrade from current version:
1. Open folder <yourname>/Library/iTunes/iPod Software Updates/
2. Remove the .ipsw and .ipsw.signature for the version you are wanting to drop.
3. Open iTunes and in Preferences uncheck automatic check for updates.
4. Connect iPod and select restore. It will ask you if you want to check for newer update. Select no and point to the ipsw file you downloaded. All files will be removed and it will have to resync the entire library but it worked.