It is possible that the pylon as pushed into the "shoe" down in the keel. That would not be good, but is also repairable.
I would recommend you download the Sept/Oct 2009 Hobie Hotline magazine. That issue included an article that specifically discussed the repair procedure for fixing a broken pylon shoe.
4 inches? That's a
lot of motion. I'm not sure if that can be fixed.
The front pylon (that's the proper term), is part of the deck layup, then when the hull/deck are joined, it rests in a "shoe" that bears against the hull. Here's a cross-section of the assembled hull/deck:
In your case, it sounds like not only has the shoe become unbonded from the hull, the pylon has become unbonded from the deck. This is a major repair, and not really cost effective on a 40+ year old boat.