I agree with you.
250.166(A) and (B) both say that the GEC shall not be smaller than the neutral conductor or the largest ungrounded conductor and shall not be smaller than a #8 AWG copper.
I believe that the inspector is mis-reading 250.166(D) to mean that the grounding electrode conductor run to the concrete encased electrode MUST be a #4, where what that section says is the conductor shall not be required to be larger than a #4.
Chris
What am I misssing? I do not have a 250.166(D)
250.66 Size of Alternating-Current Grounding Electrode
Conductor. The size of the grounding electrode conductor
at the service, at each building or structure where
supplied by a feeder(s) or branch circuit(s), or at a separately
derived system of a grounded or ungrounded ac system
shall not be less than given in Table 250.66, except as
permitted in 250.66(A) through (C).
FPN: See 250.24(C) for size of ac system conductor
brought to service equipment.
(A) Connections to Rod, Pipe, or Plate Electrodes.
Where the grounding electrode conductor is connected to
rod, pipe, or plate electrodes as permitted in 250.52(A)(5)
or (A)(7), that portion of the conductor that is the sole connection
to the grounding electrode shall not be required to be
larger than 6 AWG copper wire or 4 AWG aluminum wire.
(B) Connections to Concrete-Encased Electrodes.
Where the grounding electrode conductor is connected to a
concrete-encased electrode as permitted in 250.52(A)(3),
that portion of the conductor that is the sole connection to
the grounding electrode shall not be required to be larger
than 4 AWG copper wire.
(C) Connections to Ground Rings. Where the grounding
electrode conductor is connected to a ground ring as permitted
in 250.52(A)(4), that portion of the conductor that is the sole
connection to the grounding electrode shall not be required to
be larger than the conductor used for the ground ring.
250.68 Grounding Electrode Conductor and Bonding