I understand your problem but unfortunately can't think of a solution other than to replace some of the hardware (ie motherboard) to get yourself into a better situation to be able to install. I had a 486 pc with the cdrom setup the same way. It was a pain because you had to use dos and setup the cdrom drivers first with config.sys/autoexec.bat (I forget exactly how) and then I was able to run win9x setup from the cd from dos.
You're in a tough spot, because you need old_cd.i to use the cdrom BUT you also need one of the SCSI kernels too. If it was me, I'd try to replace some of the hardware. It doesn't have to cost a lot, just find some old components that will work together a little better.