I generally have a policy of "over 4 hours and I charge for my time." I did this in the 4-hour window, and it was a lot of fun. Much better than many other take-home assignments.
4 hours continuous or no? I can't imagine finding 4 hours of straight focus.
I don't do take home assignments, but when I did, I would offer to do it at my hourly rate, even if it was just an hour. It's time I would otherwise spend making money.
Anyone worth working with respected that and I landed several clients who forwent the assignment altogether. It's chump change in the grand scheme of things, and often a formality.
Does help that I have a very public web presence and portfolio, though.