It looks like master boot record doesn't get updated during install.
Try to boot from floppy disk (you created one right?) and if it boots fine run lilo -v as root, to update loader in the MBR. Also, if boot from floppy disk successful, check if Linux sees full drive size by typing df and checking size of the partitions created. Sometimes BIOS misreporting geometry of harddrive and linux needs to be installed with selecting NORMAL mode instead of LBA or AUTO.
Yet another (rare) case preventing MBR from being updated is BOOT sector Antivirus protection in the BIOS. Disable if its enabled.