OBJECTIVES: I. Determine the maximum tolerated dose of topotecan when administered with carboplatin and fludarabine in patients with refractory or relapsed acute leukemia or advanced myelodysplastic syndrome. II. Determine treatment related and dose limiting toxicities of this regimen in these patients. III. Determine the antileukemia activity of this regimen in these patients. IV. Correlate treatment related toxicities with steady state levels of topotecan in these patients.