1 John 1:8, right?
Does 1 John 1:8 contradict the literal understanding of 1 John 3:4-9?
I don't think so.
1 John 1:8 is either talking about indwelling sin (and not practical sinning) or else it is referring, as in the case of Hebrews 4:15, to a record of past sins; and therefore 1 John 1:10 would only be a reiteration of 1 John 1:8.
If the latter, then it would not be deceiving one's self to say that we are without indwelling sin.
Colossians 2:11 (especially in the nlt) would seem to substantiate this concept.
But I have taught over the years that 1 John 1:8 is referring to indwelling sin rather than practical sinning. In that case, then it should be clear that the element of sin within the flesh can be rendered dead (Romans 6:6, Galatians 5:24, Romans 7:8) so that it no longer has any authority over our behaviour (Romans 6:14, Romans 8:12 (kjv, nlt)).
But if it is talking about a record of sin, then it is merely saying that if we say that we have never sinned, we deceive ourselves and the truth is not in us. That is talking about the past; not the present or the future.
As concerning the present and the future, it should be clear that, whether John is using hyperbole or saying it literally, those who are born of God "cannot sin"...interpret that as you please (but be sure to ask the Holy Spirit what He means by it and then heed His voice as to the interpretation).