Did you get the job through a freelance site like Elance? Because there are a lot of freelancers on those sites in places like Malaysia who bid for pennies and drive down the rates. (Though often their work is quite shoddy and you get what you pay for.) I ghostwrite, so I can't speak to specific rates, but you should be making at least $25/hour, I would say.
But I responded (as a novelist) to say: be honest about the shortcomings. If nothing is happening by chapter four, it sounds like it's not even at the editing stage. It may need a major revision before it's ready to be edited. Is it a first time writer? Sometimes they jump to the editing stage well before they're ready. It might be the kindest thing to stop now and give them some big picture feedback, gently suggesting a major revision before the book is ready to be edited.