Since you want to finish it, I won't put it into the code, but will just give you an example... If you decide you want me to put it into the code, just let me know.
I'll use $me instead of %nick so that you can just type this in a channel/query and see the output:
//echo -a 04 $+ $left($me,1) $+ 07 $+ $right($me,-1)
$left(text,N)
This will display N letters starting from the left. So, N=1 will make it display the first letter. We set the color for that letter as shown above.
$+ will connect two pieces together so there aren't any spaces added.
$right(text,N)
This works the same was as $left, but from the right instead. By using N=-1, it will display all letters from the right except the "last" letter. Since we are going from the right, the last letter is the first letter of the nick. N=-2 would return all but the first 2 letters of the nick. If you used a negative N for left, it would display all letters except the final letter(s) in the word.
You should be able to edit that line to use %nick and then insert that in the 2 $replacex sections. If you have problems doing it yourself, let me know and I'll give you the code for it.
As a hint, only change what is after 09 in those two lines. Don't change any other %nick information.