How much RAM are you running? If you are running in excess of 512 Meg, (counting your Video card mem), Win 98 will get into memory overflow, and not enouhg mem problems.
these problems are easily solved with a few lines in the Sys.ini file, under Vcache and the ENH386.
If you are running over 1 gig, the a boot loop is almost ineveitable with out the following correction:
Add the following line in the <386Enh> section of the file:
Save the file, and then restart your computer. This limits win 98's use to 1 gig, (it's rated max)
If over 512, (including Video mem):
For systems with more than 128 MB of RAM, setting a VCache maximum of about 70% of your total RAM is recommended as prophylaxis against run-away VCache growth in rare, specialized situations.
Add the settings, (or change the settings if they exist) to show the following in the area of system.ini file
These numbers can be adjusted according to your needs, the above shows a setting for a minimum of 50 megs Vcache and a Maximum of 55 meg. (Vcache is limited internally to 800 megs)
I don't know if this is your problem or not, but the symptoms sound like you tried adding too much memory, or maybe a video card that put you over the top. Windows, when it see's more memory, will use more memory, and beyond 512 meg, will tend to use so much memory for VCache, that it uses up the system arena, and the computer no longer has enough available memory to run a program.
Hope this helped, if not, it may be good for future reference.