I have a feeling that the original poster simply wanted to be able to cram more characters into the limited display space.
Here is one person's solution for an 8x8 LED matrix; unfortunately, this solution requires that the LEDs show two or three different colors:
http://timewitharduino.blogspot.com/2012/01/mixiclock-4-digits-displayed-on-8x8-led.htmlIf the task is to make a human-friendly time display in a single-color 8x8 matrix of LEDs, my approach would be to show each digit using this classic system:
http://www.domino-play.com/TypeDoubleNines.htmThis way, you can easily fit four decimal digits into the matrix, in tried-and-true, human-readable form.