Does it appear in sysNAND? If yes, just take your SD out and and format sysNAND in the settings menu. That's what I do as a GW user.
If you use CFW, things might get deleted, I don't know.
If it's in sysNAND that you're getting the nag, go to recovery mode and then cancel out before actually updating. If you're getting it on emuNAND, then honestly there's no reason not to update to 10.4 unless you're on N3DS and using RxTools, however, you can get rid of it by using Decrypt9 to dump import.db from your sysNAND and injecting it into your emuNAND (unless I'm mistaken..I think @d0k3 was researching this).
I am getting the update prompt in emuNAND. I haven't used sysNAND in a long time now.. only CFW
I have a 2DS and i'm using RxTools with that. Hmm i want to update to 10.4 but i'm afraid that menuhax and other CIA's might not work after the update.