Among many other questions, what will you be doing with the four hour project when you're finished?
Are you intending on burning it to a dual layer DVD or recording it onto video?
A lot of the projects I work on (other than straightforward video to dvd conversions for customers) I work on in segments. Even a four hour project is not going to be four hours of the same thing. It's going to be broken up at some point, and therefore I would create individual sequences and work on a section at a time. Once all the sections are put together, then you can create a new sequence and drag all the other sequences together to make up your four hour project.
As for the question.... is the timeline limited to 3 hours. I don't know about 6.5 but I know Premiere Pro isn't. To test, I just dragged a 5 minute clip onto the timeline in Premiere Pro and changed the speed/duration to 23hours and it seems fine to me.

although now it's gonna take me a whole day to watch this five minute clip. hmmmmmmm