If you have a Sky HD box and a Sky card without subscription, which is what I took the OP to mean, then you'd get C4 HD as well wouldn't you?
I don't have Sky HD, so don't know for sure, but you can certainly get C4 SD without a Sky sub. C4 is encrypted as you say, but it isn't to prevent non-Sky users getting it for "free" on Sky, it is to prevent other countries from receiving it via their satellite receivers. I guess C4 HD is the same and you can actually get it "free" using your Sky HD box/Sky card without subscription.