Very hard to explain this question without a diagram, so I'd suggest anyone reading this draw one (and even then I'm not sure it's easy to follow, sorry!) : if you draw the diameter AB and the line we want, CD, so they're horizontal, and then draw vertical lines from C and D down to the line AB, you'll make a big rectangle inside the trapezoid. We just want to know the horizontal length of this rectangle. Let's call the two vertices of this rectangle that lie on the diameter X and Y, so X is beneath C, and Y is beneath D. Notice we've made two small right triangles on either side of the trapezoid (ACX and BDY), each with a hypotenuse of 2.
Now if we draw a radius from the center O of the circle to point D, we'll make another right triangle, ODY. The hypotenuse of this triangle is a radius, so is 4. ODY and BDY share a vertical side DY, which we can call "h". If the horizontal length OY is "c", then the length BY is 4-c, because those two lengths form a radius. So we have two right triangles, and we've labeled their sides, and we can use Pythagoras for each:
h^2 + c^2 = 4^2
h^2 + (4 - c)^2 = 2^2
and subtracting the second equation from the first, and using the difference of squares:
c^2 - (4 - c)^2 = 16 - 4
(c + 4 - c)(c - (4-c)) = 12
(4)(2c - 4) = 12
2c = 7
and 2c is the length of the rectangle that we're looking for.