Cast on about 36 sts and measure the 4" in the middle; the edge sts curl under and don't measure the same as sts in the center. It might be easier if you think of it as 7st per inch, right now you're getting 8. The needle size you use is the needle size you use, doesn't matter if it's a size larger or 6 sizes. If you do get 8 sts/inch, then the scarf will only be about 7" wide rather than 11". Oh, and the final dimensions are after blocking, so you should try to block your swatch too; it may be that you can actually back down to a 3 or 4.