Try deleting your partitions first. Boot up using the 98 floppy and when you get to the a: prompt type
fdisk when you get into the list of 4 choices choose to delete your primary partition.
When you have deleted your partition you will have to set it up again.
Select to create primary partition and follow the instructions.
Once it has created the partition reboot using the 98 floppy to the a: prompt and type format c: you should now be able to format the hdd.