Thanks to larrylje's guide, I have successfully upgraded from 3.2U to 4.0U and retained homebrew, gamma loader, and USB loader all working. I used the Nintendo update option (method 1). However, the main draw to 4.0 was using large SD cards and running wads from SD. I checked functionality of WAD manager, running a wad from SD, and such with my current card (1GB). However, when I tried my 8GB SDHC card, which I had copied all the files over to, it wouldn't work. I've searched for answers and the only things I've found were old (pre-4.0) where people had tried to use SDHC cards. 8GB SDHC can't be formatted to FAT (or FAT16). The only options I get are FAT32 (default), NTSC, and exFAT (which I've never heard of). I also tried formating in FAT32 with 16KB sections instead of 32KB, but no luck.
With the 8GB card, homebrew sometimes boots, but most of the time it just says "loading SD" and then goes to bubbles background with no apps listed. Wad Manager won't work - get error ret = -1. I tried an emulator in homebrew and it said "Fat mount failure". So I'm assuming it has something to do with the FAT format.
For those of you who are successfully using an SDHC card with 4.0, how did you do it?
Thanks in advance. Sorry for the novel, but I thought it would be useful to include as much information as possible.
Forgot to mention, the card that isn't working is Kingston 8GB SDHC, and has in the corner SD4/8GB. Not sure what the SD4 is unless it's the 4th generation of SD?
I also have a similar issue. I have an 8GB Kingston (the same model probably). I initially did my soft mod with a 4GB Micro SDHC with an adapter. I then got my 8GB, transferred all my files to the 8GB, it worked fine for about two weeks. Then stopped being readable by Homebrew apps, yet it would still read in the HBC. I still haven't found a fix for it though... so I'm back to using my 4GB micro.