Recent Linux distros are aimed to 500mb or more of RAM, practically impossible to run them in old machines. I have the same experience you have now. I have tried and installed a minimalist distro called Absolute Linux, from here you can download a cd image:
I have successfully installed Absolute Linux in an old machine, yet it runs very fast.
If it doesn't work you can try this, another small linux: http://www.damnsmalllinux.org/download.html
Finally, you can sure install a linux in a 170mb by building it your self (to tell honestly linux even runs in floppy drive, isn't it?) so you can fashion your own custom, use LInux From Scratch, it may require a bit of reading but sure you will solve the problem, get LFS here:
Hope this helps.