OUTLINE: Patients receive high dose dexamethasone on days 1-4, 9-12, and 17-20, followed by 4 weeks rest. Cyclophosphamide (CTX) is administered intravenously in combination with mesna following dexamethasone therapy. Sargramostim (GM-CSF) is initiated subcutaneously 1 day later and is continued for 10 days to support stem cell collections, which begin 10-14 days after CTX induction. Following 4 weeks of rest, melphalan (L-PAM) is administered over 1 hour. Stem cell rescue is begun 48 hours after L-PAM therapy. Three to 4 months after the first L-PAM course, a second L-PAM and stem cell rescue is undertaken. Interferon alfa-2b (IFN-A) maintenance is administered 3 times per week following bone marrow recovery from the first or second L-PAM courses. Patients achieving complete remission following the first course of L-PAM may proceed directly to IFN-A maintenance. Patients achieving greater than grade 3 nonhematologic toxicity or not achieving an absolute neutrophil count of greater than 1,000/mm3 by day 21 posttransplant are not eligible for dose escalation.