Does Android 4.3 fix USB OTG on Nexus 4 when used with an external power source? It seems to be fairly well established that the Nexus 4 has had issues with not supporting USB OTG since launch (e.g. this bug report).  From what I've read it's both a hardware and software issue.  The hardware can't supply the necessary power and the software does not conform to the protocol in some way.  I'm happy to use a Nexus 4 with an external power source (Y-cable), which should solve the power issue.  What I'd like to establish though is, does Android 4.3 do anything to fix the software issue?
No, 4.3 doesn't address that at all.  You'll still have to use the kernel that Ziddey has posted on xda-developers.com.