Do you want to know my honest opinion? The nano 1G is an already very old device, and it might not be worth the effort and the money to upgrade its memory (plus, as you stated, 4GB is the maximum memory supported by the original firmware). You could consider buying one of the Sansas supported by Rockbox, as they aren't very expensive (even those with a color screen and 8GB+SD memory) and might be more worth than updating the memory on an already old device (unless you get the memory chips for free or real cheap, and you're sure you won't break the device while putting the new chips).
This is, of course, just my opinion.