I had some trouble getting win98 to read a drive that had been partitioned for linux, although it never froze fdisk...
In the end it just took lots of elbowgrease (figuratively) trying every which way of clearing the drive and partitioning it. I used diskdrake on mandrake 9.1 to clear all partitions and then create a FAT32 fs, I also used it to simply clear the drive of all partitions. This might allow fdisk to read it better.... I also had an excellent floppy from Maxtor, the manufacturer of my drive, which had it's own partitioning and formating app. I used fdisk (running off a floppy cause I had no OS) to delete all the partitions and create a primary DOS partition. In the end I just had to try over and over and over, but win98 eventually was able to install ok after fdisk erased all partitions and win98 setup formatted the drive itself. I know the situation was slightly different (I had a safe backup of all data and could clear off entire drive) but I hope some of that helps.