Using {1 \over 2} m v^2, we get the initial energy of the ball to be:
{1 \over 2} \times 4 \times 8.5^2 = 144.5
However, at h the ball still has velocity (8.5 ms-1), as well as having done work against air resistance (the 4 J mentioned in the question). This leaves the remaining energy at:
144.5...