that's really odd. there was another thread some days ago with the same problem (http://www.linuxquestions.org/questi...threadid=89484
If I'm not wrong, a gateway must always be on the same subnet to forward packets. There must be some non-standard implementation in Windows' networking code to be able to work.
One more test you might want to try is issue tracert on the present win98 gateway and take note of the IP on the first hop and try using that IP as the gw if it returns a different value than what was configured.
not sure if it's going to work but it's worth a try :P