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Wonder if it's similar to the free space issue that affected the HTC Camera App from working properly with 4GB cards on the apache. You had to fill up space on the card (or repartition it--I don't even want to get into that) so that it had less than 2GB free.
So try that, fill up your 4GB card so that less than 2GB are free and see if the music store still has the problem.
Otherwise, no clue--I assume you are using the Sandisk 4GB SDHC?
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