Sounds like a laptop. And in that case, the HDD should be module/removable... so if there's a connection problem, the bay needs replacing.
Otherwise, if the HDD is internal/fixed, then you should check it.
Windows 98 has a thing for hardware compatablity. It may not like the HDD, as opposed to not being able to see it.
To check, boot into MSDOS and copy the files from the Win98 CD onto the HDD:
copy D:\ C:\
If it copies, then you've got a compatability issue. If not, it's a hardware issue.
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