That message you get about drive C not containing a valid FAT\FAT32 partition pops up probably because the drive is formatted using NTFS. 98 boot disks can't read these types of drives.
What you need to do is create an NT boot disk. I'm not fully sure on how to do this, but if you search back through the threads, or look on some of the 'Forums Experts' FAQs, I'm sure you'll find it. Once you have one, you should be able to boot into DOS, backup some files and then restore the computer.
Alternatively, you may be able to put in an NT CD and select repair. Only thing with this is you'll need the Emergency Repair Disk which I'm guessing you don't have. Hmmm...
In fact, I would say the best thing to do is take the HDD out of the computer and put it into another NT machine as slave. This way, the NT machine will boot up and pick the other HDD from which you'll be able to backup the info more efficiently (then wipe and reinstall).
If it is infact not an NT machine, try putting the disk in a 98 machine and backup.
The rattling suggests a dodgy hard disk, so work fast!
Anyway, I could be wrong on all this, but I'm just writing what I'm thinking as I go along. It would be worth getting more info off your boss and posting back here. Info to get is what OS, when the problem started, any software recently installed etc...
Rgds