Are we talking about a work account? Do you know if you are connected to an exchange server?
A couple of suggestions:
1) Make sure your deleted items is empty (this happens to me a lot)
2) Click on your folder list (if outlook 2003 or above). Look for a folder called 'Mailbox - Your Name'. Is this the
same folder that has your inbox, calendar, contacts underneith it? or is there a "differeent" inbox and calendar.
If it's different check the size of these files/folders. Your quota is based on the contents of these folders, although, you might have your mail delivered automatically to a personal file, there may be items on this folder that need cleaned up.
Try calculating the folder size of the top most folder you have by right clicking on it and choosing properities. Look a tthe Total size including subfolders and compare that number to the limit usually shown in the rejection email.
If the numbers match or are close and it is small as you say 98kb then as was previously mentioned it is probably a misconfiguration of quota on the mail server.
Hope this helps.
Here are some instructions on archiving that may help as well
http://www.outlookexchange.com/Articles/santhosh/outlook.asp