Arsenic Trioxide, Ascorbic Acid, Dexamethasone, and Thalidomide in Myelofibrosis/Myeloproliferative Disorder

DISEASE CHARACTERISTICS: * Chronic idiopathic myelofibrosis or myelodysplastic/myeloproliferative disorders (MDS/MPD), including the following subtypes: * Chronic idiopathic myelofibrosis (with extramedullary hematopoiesis) * Chronic myelomonocytic leukemia (CMML) * Atypical chronic myeloid leukemia * MDS/MPD disease, unclassifiable * MDS with ≥ 2+ fibrosis present in the bone marrow * Patients with MPD must be negative by fluorescent in situ hybridization (FISH) for the BCR/ABL fusion gene PATIENT CHARACTERISTICS: * ECOG performance status 0-2 * Life expectancy of at least 3 months * Platelet count \> 10,000/mm³ * Bilirubin ≤ 2.5 times upper limit of normal (ULN) * SGOT and SGPT ≤ 2.5 times ULN * Creatinine ≤ 1.5 times ULN * Potassium ≥ 4.0 mEq/dL (supplemental electrolytes allowed) * Magnesium \> 1.8 mg/dL (supplemental electrolytes allowed) * Absolute QTc interval \< 460 msec * Patients who have a QT \> 460 after electrolyte repletion and discontinuation of other unessential QT-prolonging drugs will be excluded * Negative pregnancy test * Women of childbearing potential must use medically acceptable birth control (two methods of birth control or at least one highly active method and one additional effective method), starting 4 weeks prior to starting thalidomide, all through thalidomide therapy, and for 4 weeks after discontinuing thalidomide * Male patients with reproductive potential must use a latex condom every time they have sex with a woman from the time that they start taking thalidomide, all through thalidomide therapy, and for 4 weeks after discontinuing thalidomide * No sperm or blood donation during study treatment * Must be willing and able to comply with the FDA-mandated System for Thalidomide Educational Prescribing and Safety (S.T.E.P.S™) program * No other serious medical condition, laboratory abnormality, or psychiatric illness that, in the view of the treating physician, would place the patient at an unacceptable risk if he or she were to participate in the study or would prevent that person from giving informed consent * No preexisting neurotoxicity/neuropathy ≥ grade 2 * Not pregnant or nursing * No cardiac conduction defects * No unstable angina * No myocardial infarction within the past 6 months * No congestive heart failure of any cause * No New York Heart Association class II or greater * No other significant underlying cardiac dysfunction * No prior malignancy in the 3 years before treatment in this study (other than curatively treated carcinoma in situ of the cervix or nonmelanoma skin cancer) * No sulfa allergy that would interfere with administration of trimethoprim sulfamethoxazole prophylaxis * Patients with sulfa allergies who could instead receive pentamidine prophylaxis also will be excluded * Patients with sulfa allergies who can instead receive atovaquone may be included PRIOR CONCURRENT THERAPY: * At least 4 weeks since prior investigational or approved therapy for this disease * No growth factors within 1 week of study enrollment * No other concurrent cytotoxic drugs or other investigational agents