Sorry, this one is answered in the faq: http://home.comcast.net/~ebeach/faq.htm.
Exception 3 to this procedure discusses Protestant units returning home. Can the Protestant end this procedure with more than 4 units in a space (perhaps to avoid undergoing attrition)?
No. There is a strict limit of no more than 4 Protestant units per fortified space at the end of the Land Unit Return Home Procedure. The Protestant player must shuffle units to other electorates until this limit is satisfied. If still overstacked, excess units are eliminated.
I presume the same would apply to another power that had lost its capital(s).