Ok, another thought. Make a boot floppy (if ya don't already have one), then reformat the HDD after loading Maxblast (DDO). Should be able to boot from floppy by pressing akey after DDO loads (I think).
Once you've reformatted the HDD (one single 40G partition), reboot, and reboot from the floppy (after loading DDO). Select to allow CD-ROM support. The copy the wholw win98 directory form the CD to the new HDD partition (call the folder win98 - anything BUT windows!

). Then you should be able to run setup directly from the HDD, so that when it reboots, it'll allow DDO to load before loading OS.
Hope that works - if it don't, maybe DDO isn't loading properly for some reason.
Cheers
Mick