Check your bios to see if it sees the HDD as 4 gig. If it doesnt, find an upgrade for the bios. Also try to turn on LBA in the bios for the HDD.
If the bios upgrade does'nt work you will need a Drive Overlay, that will translate the info for the drive to the MB. Ontrack and Seagate have software to do this. A FAT drive can be under 2 gig, can you use FAT32, Fat32 can be over 2 Gig to 8 Gig.
When you start FDisk it will ask if you want to make all the space a large drive available, hit 'Y', then FDisk starts. This is how FAT32 is enabled.
Partition Magic can convert without destroying data, Fat to Fat32. But you must be able to see the drive in the BIOS as a 4 gig drive first.
Since your drive is only seen as 400mg. I would Fdisk, format and re-install Win98.
Good Luck
TM.