That shell=Explorer can be replaced temporarily with either Winfile.exe shell or Progman.exe. These instructions are for Winfile and will get you in, so that you can replace Explorer with a new copy. That may be the problem, but I would think you'd get an error message. It won't hurt anything to try.
You need to extract a new copy of Explorer.exe. You'll need your OS CD handy, unless you have Cab files on your hard drive, normally in C:\windows\options\cabs.
First, you'll need to edit 'system.ini' in DOS to temporarily replace the Explorer shell with Winfile. Then you can access your start menu. Boot to the command prompt.
At the C:\> prompt (press enter after each line) type:
cd windows
edit system.ini
Now change the shell=explorer.exe to shell=winfile.exe
FROM :
http://www.annoyances.org/exec/forum/win98/r1042788572