If you're willing/going to format the E: hard disk, use a 98 Bootdisk (
http://www.cyberus.ca/~danpenny/WIN98SE.EXE ) to boot the machine without CDROM support. (Check your bios boot sequence for A: being the first boot device.)
Then copy delpart.exe (
http://www.cyberus.ca/~danpenny/delpart.zip ) to a second floppy. Once the system boots to the A:\> prompt, switch floppy disks and type in;
delpart
and hit Enter. You will be given a choice of which hard disk you wish to act upon. Ensure you choose the correct hard disk. Delete all partitions on that hard disk. Exit when finished, remove the floppy and boot the machine normally. If the hard disk parameters are correct in the bios, XP will find it. Partition and format it.