If you can remove disk and prepare it externally, You can try following
"workaround":
prepare FAT16 type system partition on begin of disk formatted by MS-DOS
6.22 (see www.bootdisk.com for system floppy image, if you have not any).
Rest of disk space can be preformatted as one or two big NTFS partitions,
depending on disk size and type of use. Copy i386 folder from CD to this
FAT16 partition and return disk back to your machine, boot to DOS, go to
i386 folder and run "WINNT /B" command to start NT setup. If you need more
space then FAT16 partition can hold, direct setup to install to another
(preformatted!) NTFS partition.

Warning! To preformat NTFS partitions on your disk, use only win NT system!
Do not use w2K or WXP, they are using NTFS systems incompatible with NT
setup! It is possible to even install temporary NT instance to first small
FAT partition and use it to repartition rest of disk before setup of final
OS instance. NTFS partitions should be preformatted before start of setup,
as NT setup is able to use preformatted NTFS partitions but it is not able
to format them itself! If you want to install to partition that ends above
first 7.8GB on (E)IDE disk, you need to have updated  ATAPI.SYS ver SP4
driver disk and use F6 trick on begin of NT setup to install your OS
properly. Full access to disk space after first 7.8GB of IDE disk you can
get after installing at least SP4 (SP6a recommended, however).

Notes:
maximal size of system FAT16 partition is only 2GB (2047MB) - this
limitation si coming from use of DOS for first installation step. NT based
systems can maintain FAT16 partition up to 4GB, so if you need one partition
in size between 2-4GB, you need to preformat it as FAT16 under NT system or
NT setup (again beware of w2K and WXP as they will format it in  FAT32),
boot from DOS floppy and run "sys c:" command to replace NT loader by MS DOS
files.

minimal size depends on chosen Win NT partition scheme (depending on size of
your disk and applications to be installed):
To hold only installation files you need about 150MB of space (they have
only 80MB, but you need to cover slack space and you need also some
manipulation space for NT setup files)
To install minimal NT instance (including i386 folder) you need at least
300MB
To install patched NT and hold install files you need about 450MB at least.
If you wish to install also applications, add application size to this
number.

Standard recommended scheme for large disks:
C: FAT16 partition 500-2047MB, holds NT loader files, installation files and
eventually "secondary" OS instance for fast troubleshoting purposes.
D: NTFS partition up to first 7.8GB, holds main NT OS instance files and
basic applications
E: NTFS partition up to end of disk, holds data, spooler, temporary folder
and eventually also user profiles.