How to enlarge a 4 in. vent hole on exterior wall
Buy a 5" holesaw (and a drill sturdy enough to drive it). Cut a 5" hole in a big chunk of plywood. Screw/nail/clamp the plywood in the place where you want the hole. Drill away.

If you're having a hard time with the drill binding and trying to twist your wrist off, run it in reverse. It's much slower, but you won't have the same problem.

Couple more tips: Once you've started the cut, drill a few 1/4" holes in the cut ring to help clear sawdust. Pull the holesaw out regularly to clear the sawdust that collects on the teeth.