PEG-Interferon Alfa-2b and Thalidomide in Treating Patients With Recurrent or Metastatic Melanoma

DISEASE CHARACTERISTICS: * Histologically confirmed malignant melanoma, including any of the following: * Cutaneous melanoma * Ocular melanoma * Mucosal melanoma * Unidentified primary tumor * Recurrent or metastatic disease * Bidimensionally measurable or evaluable disease * Brain metastases allowed provided disease is stable for ≥ 6 weeks after prior radiotherapy PATIENT CHARACTERISTICS: Age * 18 and over Performance status * SWOG 0-2 Life expectancy * At least 12 weeks Hematopoietic * Absolute granulocyte count ≥ 1,500/mm\^3 * Platelet count ≥ 100,000/mm\^3 Hepatic * Bilirubin ≤ 2 times upper limit of normal (ULN) * SGOT ≤ 2 times ULN Renal * Creatinine ≤ 2 mg/dL Cardiovascular * None of the following conditions within the past 3 months: * Congestive heart failure * Second- or third-degree heart block * Myocardial infarction Other * Not pregnant or nursing * Negative pregnancy test * Fertile patients must use effective double-method contraception (1 highly effective and 1 additional method) for ≥ 4 weeks before, during, and for ≥ 4 weeks after completion of study treatment * No other malignancy within the past 2 years except adequately treated skin cancer or carcinoma in situ of the cervix * No concurrent blood, sperm, or ova donation PRIOR CONCURRENT THERAPY: Biologic therapy * Prior biologic therapy (e.g., interferon) allowed Chemotherapy * Not specified Endocrine therapy * Not specified Radiotherapy * See Disease Characteristics * At least 28 days since prior radiotherapy Surgery * At least 28 days since prior surgery Other * No more than 2 prior systemic treatment regimens for metastatic malignant melanoma