you need the correct bootdisk with fdisk to see it, in addition the bios has to support that. I know you say you see the correct geometry in the bios, but i dont remember the limit that those machines can see by heart. I know in the past I had used the diskkete that came with the harddisk to enable the bios and os to see the full capacity of a big harddisk.
download a win98 bootdisk from here http://www.bootdisk.com/ and test it.
when you boot with the boot disk, enable the cdrom support and copy the win98 to the harddisk and start the setup from the harddisk.
Check also if you can not flash update the bios to a newer version.
(verifying , use the enable large ide support when you use the fdisk command.)
http://tinyurl.com/ytmx8
check specific this section
Windows 95 and MS-DOS use the FDISK utility to partition a disk. When it accesses a hard disk, FDISK uses the system AT ROM BIOS INT13h interface, which has a maximum of 1024 cylinders, 255 heads, and 63 sectors per track. FDISK can access any drive within the limits imposed by the AT ROM BIOS, which means that FDISK can access drives of up to 8 GB, calculated as follows:
1024 cylinders x 255 heads x 63 sectors per track x 512 bytes per
sector = 8,422,686,720 bytes, or roughly 8 GB
The original IDE hardware interface is limited to 16 heads, which reduces the maximum drive size to 504 MB. Newer IDE (ATAPI) technology, however, uses a translation scheme called Logical Block Addressing (LBA) to exceed the 504 MB limit as imposed by the system AT ROM BIOS and IDE specifi- cation. SCSI and ESDI hard drive controllers use similar translation methods that are usually built into the controller card's ROM BIOS to exceed the 504 MB size limit. For more information about the use of large hard disks with MS-DOS and Windows 95/98, please see the following article in the Microsoft Knowledge Base
