Because of the double YO it does make a long st that's why you're going to work 4 sts in it. It may help to take one loop off the needle to make it easier to k1, p1, k1 p1 into it. Maybe practice it a little with some scrap yarn and other needles. CO 8 st, knit a few rows, then k4, yo2, k4, turn and p4, do the 4sts in the loop, p4. Knit a few more rows then try it again.
I just thought of something. Maybe you're not supposed to k1p1 twice, but to only k1 p1 in the YO2. Do you have a link to a pattern? You could be interpreting it wrong, or I'm looking at what you wrote wrong.
sue- knitting heretic