The Restored Blade of Aihonen is +5. Yes, there is the stuff about being within a dragon's flight of the lake, but that includes the whole game. If you have 5 skill points in large swords, this blade is better (by +1) than the paladin sword Pale Justice, because a paladin can get only 2 skill points.
I can see that you might want a good sword sooner, though. The Restored Blade of Aihonen you get very late in the game.
The only long sword +4 listed in the hint book is the Long Sword of Action +4, which grants +1 AC, an extra attack per round, and 15% slashing resistance. (There's also a Long Sword of Action +2, a different item.) I've never found it, don't know where it is. Apparently it's a random item. Presumably it's also found pretty near the end of the game. The extra attack probably makes it preferable to the Restored Blade of Aihonen.
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