I tried to no avail to get more information on this error so I thought I would post my findings here instead.
This error is generated when an item of content in a library referred to in the syndicator makes reference to a WCM item in another library that exists on the syndicator.
This in itself will not generate an error unless the library in which the reference is made does not exist on the the subscriber.
On the syndicator, you have an HTML component (comp1) in Library1 which makes reference to an HTML component (comp2) in Library2.
The syndicator is set up only to syndicate Library1
The error message SERV_FAILED_REFERENCE_UPDATE_4 will now occur when the syndicator attempts to syndicate comp1. The failure occurs because the subscriber can not create the necessary internal reference to comp2.
To fix this, you must either:
Add the library to the syndicator (to allow that library to syndicate to the subscriber)
Remove the reference from the offending item(s)
Hope this helps someone