Sorry that was a mistake. The underlying spectrum with D_4-action is actually the one you expect, so I think this D_4-spectrum should be exactly what you want.
In general if E is a G-spectrum and H is a group of order n, then the n-fold smash power of E is canonically a G≀H-spectrum: first pull back along a projection BG^n → BG and then norm along BG^n → (BG^n)/H = B(G≀H).