If your PC crashed during the little SCANDISK exercise above, you'll most likely need to use an ESD for your particular version of WIN98. However, if you managed to boot to WIN98, make a complete backup ASAP. Then check Device Manager for possible HD or controller problems.
If SCANDISK/SURFACE didn't solve your problem, probably the next thing to do is to check your HD partitions with FDISK and repair them if necessary (and, if possible).
Insert your ESD and boot to the A:\> command prompt. Then, see if you can access all of your drives, especially the active root of the HD, probably C:\>
If this works, most likely you'll be able to recover most of your data. If you can't access your HD, try the following steps as a last resort:
From the A:\> prompt type: FDISK/STATUS (no spaces) This will present you with a list of all the partitions FDISK can see. If any are damaged you'll get one of several possible error messages.
If you get an error message, type FDISK/MBR This will restore a copy of your master boot record stored in the "Saint Elsewhere" sector of your HD.
Next, from the A:\> prompt type: SYS A: C: This will restore your DOS boot files if they are damaged.
Once again, see of you can access your hard drive from the A:\> prompt. If so, you may want to restore your registry in case some of it was sitting of a bad HD sector.
Next, from the A:\> prompt type: C:\WINDOWS\COMMAND\SCANREG.EXE/RESTORE
When the blue screen comes up, highlight the most recent rb00X.cab file that says "Started" and then press the "RESTORE" button. This will restore the most recent working copy of your registry, in case it was damaged. (You need to make sure SCANREG is in the DOS path or you won't be able to use it.)
This should repair most of the essential files necessary to boot into WIN98.
FINAL NOTE: Although it's a bit unlikely, it's not beyond possibility that fluctuatiing voltage from a dying PSU is causing the HD heads to write garbage or damage the magnetic media of the HD. I've seen it happen on more than one occasion. So, at some point you may want to check out the voltage on your PSU leads, especially if your PC is more than 4 years old. Otherwise you could go through a lot of HDs and motherboards.