Is there a firmware update for the Apple RAID Card [early 2009 Xserve] that will take it beyond the E-1.3.2.0 version and allow it to see 4TB drives?

So far as I know, no. This is why I stayed away from Xserve, even though apple let go of a good thing (well not really for them because they would charge almost $10k for an 8-core 32GB model now when I could just buy a Dell server for less than 25% of the cost). Apple 100% dropped support for server on the hardware side including the Mac Mini Server Edition. Granted Server is now only $20 (with some drawbacks and some new stuff that's worth it like the $20 price point). But if I were you,, sell it or keep it as a function piece of nostalgia. But get a 27in iMac or prepare your wallet for a Mac Pro and buy a thunderbolt RAID array. The RAID arrays are 3rd party so they will probably support them for a very long time plus you get a pretty fast transfer rate.