If Tony's suggestion still does not work, can you get into Windows Safe Mode?
Select F8 on boot up, and when the screen gives you a menue, select Safe Mode.
Go, Start; Run; and type in "sfc" (without the quotes).
This will run System File Check. If you have any corrupted system files, it will ask you to repair them. Place your Win98 CD in the computer and follow the instructions. It will also ask you if you wish to back up the old files, recommended!
This is not a cure all, but it has helped me out on many similar occasions.
Hope it helps.