Do you have Norton SystemWorks installed? If so, check the following articles:
"ScanDisk Cannot Check This Drive Now Because the Disk ... :
http://support.microsoft.com/?kbid=280450
"Windows Cannot Defragment This Drive now Because It Has Been Locked by a Disk
Utility" When Using Disk Defragmenter:
http://support.microsoft.com/?kbid=286810
Although written for Windows ME, I suggest you follow the instructions, using the
Win98 boot floppy in your case.

Signature
Glen Ventura, MS MVP Shell/User, A+
http://dts-l.org/goodpost.htm
> When I try to run Scandisk it says "Scandisk cannot continue because a
> program such as a Disk Utility has locked this drive. Close the program or
> wait for it to finish".......As far as I know there is no other disk utility
> on my computer.....Any way to find out what this means?