Incredibly laggy in the nether then crashes

You need to assign more memory:
http://hopper.minecraft.net/help/out-of-memory/

I have 4gb of my 8gb allocated to it, never crashed before these snapshots

JVM Flags: 3 total; -XX:HeapDumpPath=MojangTricksIntelDriversForPerformance_javaw.exe_minecraft.exe.heapdump -Xmx4G -Xmx512M

Java is picking up -Xmx512M option from somewhere. Please visit our technical support resources on the Mojang Support Center to help troubleshoot the issue.