I've posted this a few times but haven't heard if it has worked for anyone else.
When I bought my 97, the seatbelt was doing the same thing.
I had to unbolt the seatbelt reel from the bottom of the rollbar for another job.
The reel retracted itself as far as it would go - it wound itself up so it was about level with the door striker.
I pulled the reel back down and re-bolted it to the bottom of the rollbar and the seatbelt started retracting normally from that day on.
I have no idea why it worked - maybe spooling up as far as it would go somehow retentioned it
That was over 2 years ago and it's been working great since.
Heads up - When pulling the seatbelt reel back down to rebolt it in position, the reel must be dead level or it will lock up.
Any deviation from dead level in any direction will cause it to lock.