Woah, old school!! Brings back some memories!!
It sounds like you have some file corruption for whatever reason, perhaps a HDD on its way out?! There are lot of .sys files in Win98 used in the boot process and its likely to be those that are corrupt or missing.
You can perform a repair with the Win98SE CD if you have it. If not it will be readily available no doubt in torrent land.
Alternatively if you just want to have a poke and perhaps copy the missing or broken files from another 98 machine then create a bootdisk floppy and copy them manually. You can get a suitable bootdisk image from bootdisk.com