4 psi at what rpm? At idle that would be ok but I would think it was marginal at higher rpm.
Those engines have an inlet regulator built into the pump that controls pump output in response to pressure at the center main bearing. It sounds as though yours is working if it starts out at 25 psi cold so I would be looking more at bearing clearances, pump wear and oil viscosity than the pressure regulating valve. I suppose if the pressure drops immediately after it builds up, it could be a broken or weak spring in the inlet regulating valve. As soon as pressure builds up it would push the valve closed, starving the pump for oil and dropping the output pressure. A gradual drop as the oil warms up sounds more like excessive clearance somewhere or very low oil viscosity.
Just a point of interest, I got a 212 grader with no oil pressure. Pulled the engine and took the pan off to investigate. I quickly realized that someone had been in the engine before because of their extensive use of red silicone. In the end I discovered the pump had ingested one or more roll pins that had been left inside the suction bell. There were still a couple left in there when I took it apart! Not having a new oil pump, I cleaned up the gears and the housing, reassembled it (without stray hardware) and got good oil pressure according to the CAT gauge. The pressure control valve plunger and spring was fine.