Not a Valid Win32 bit App

Suddenly, nothing on my computer will run at all. I can open folders, but every time I try to start a program I get a message “Not a valid Win32 bit App.” and nothing starts. Running Win98SE. Can’t open control panel or System inf. Can’t run any command line progs in Windows. I tried Scanreg/fix, but doesn’t help. Scanreg/restore hangs. System recovery disk starts to reinstall Win98 over old OS, but hangs. Any suggestions other than a complete HD format and clean install?