PROTOCOL OUTLINE: This is a dose-escalation study of a conditioning regimen. Patients receive 1 of 3 dose levels of chemotherapy prior to peripheral blood progenitor cell (PBPC) transplantation. Patients at dose level 1 receive cyclophosphamide IV over 1 hour on days -7 and -6 and fludarabine IV over 30 minutes daily on days -5 to -1. Patients at dose level 2 receive cyclophosphamide IV over 1 hour on days -7 and -6, fludarabine IV over 30 minutes daily on days -5 to -1, and antithymocyte globulin daily on days -5 to -2. Patients at dose level 3 receive cyclophosphamide IV over 1 hour daily on days -8 to -6, fludarabine IV over 30 minutes daily on days -5 to -1, and antithymocyte globulin daily on days -5 to -2.