How could you consider that a defeat. Tsunade would have beat the living crap out of Kabuto. She just had to get over the blood thing. Hell if she suffered a defeat to Kabuto then why was she good to go when she was fighting Oro. Kabuto had to knife himself to draw blood in order to get an upper hand. The fight wasn't even concluded. It was concluded by Naruto.

As for the 4th's strength. He was far stronger than the 3rd. Why? The fact that the third selected him proves it. Think about it. The third knew that the 4th was exceptionally strong, that's why he named the 4th hokage. The 3rd selected the 4th over Orochimaru. The most convincing point is that the third hasn't selected anyone to become hokage since the fourth. If there was someone strong enough to replace him as hokage then he would have selected another successor. He didn't select a successor even at his old age, because he knows that there wasn't anyone to fulfill the requirements. This shows that the third only makes selections based upon merit, strength, and skills. The fourth was exceptional, stonger than himself (the third), or else the third would have remained Hokage.

answer to post below:
I know that the 4th was basically in his prime when he sealed Kyubi. If the third was also in his prime, and there was a match betweent the two. Especially after seeing the animated version of the first and second hokage fight, I just know that third would have been hit by a life threatening RASENGAN. The fourth was a genious at developing jutsus. That is something that the third lacked. That is also why the third feared the last coffin that Orochimaru summoned. "No matter what I must stop that one." That would have been an awesome fight.