why not the classic pxelinux/memdisk approach?
LABEL 1
menu label Dos
kernel memdisk
append initrd=DOS.img
edit
memdisk is able to emulate a HDD, a CD, a floppy disk, etc, sometimes it does a good job analyzing your image and detecting what you want to mount and sometimes you have to say it with a command line.
for a DOS disk just use
append initrd=DOS.img
or
append initrd=DOS.img edd
or
append initrd=DOS.img floppy
The differences are explained on memedisk page they basically force different emulation modes.
i.e. edd = emulation of Enhanced Disk Drive Services for floppy disks
when they say "Windows 98 DOS requires a floppy controller." it is not true; at this level no one touches the floppy controller but the BIOS int 13h; and this interrupt is what memdisk emulates. the different modes affect the returned value from int 13h, ah=15h -> Get Drive Type