DISEASE CHARACTERISTICS:

          -  Diagnosis of 1 of the following:

               -  Acute lymphocytic leukemia

                    -  In ≥ second complete remission (CR), defined as < 5% blasts in bone marrow
                       (BM) and no active extramedullary disease OR in first CR with any of the
                       following high risk features:

                         -  History of induction failure

                         -  Philadelphia chromosome positive

                         -  t(4;11) by cytogenetic analysis

                         -  Any infant with MLL rearrangements on cytogenetic analysis

                    -  No relapse with isolated extramedullary disease after completion of prior
                       treatment

               -  Acute myeloid leukemia

                    -  Failed induction therapy after < 3 courses

                    -  In ≥ second CR, defined as < 5% blasts in BM and no active extramedullary
                       disease OR in first CR with any of the following high-risk features:

                         -  History of induction failure = 5q- or monosomy 7 cytogenetic findings

               -  Any of the following myelodysplastic syndromes:

                    -  Refractory anemia (RA) with excess blasts (RAEB) with a high International
                       Prognostic Scoring System (IPSS) score or score of intermediate-1(INT-1) or
                       intermediate-2 (INT-2)

                    -  RAEB in transformation with INT-1, INT-2, or high IPSS score

                    -  RA with INT-2 score

          -  Patients must have a healthy, related donor who is at least genotypically HLA-A, B, C,
             and DR haploidentical to the patient

               -  No suitably matched family donor defined by genotypic or phenotypic identity for
                  ≥ 5/6 A, B, or DR loci

               -  No immediately available genotypically matched (6/6) unrelated marrow donor

               -  No immediately available umbilical cord blood donor with suitable cell dose after
                  a search ≥ 2 months

               -  Patients whose medical condition is at high risk of deteriorating or whose
                  disease is at high risk of progression during a donor search are eligible

          -  Has a parent with a haplotype that is disparate from that of the donor for the
             haplotype shared by the patient and parent, but not shared by the patient and donor OR
             patient is able to donate sufficient autologous cells by peripheral blood draw or
             unstimulated leukapheresis

          -  No active CNS disease

        PATIENT CHARACTERISTICS:

          -  Room air O_2 saturation > 95% unless the lungs are involved with disease

          -  No clinical evidence of pulmonary insufficiency unless the lungs are involved with
             disease

          -  AST and ALT < 3 times upper limit of normal (ULN)*

          -  Bilirubin < 2.0 mg/dL*

          -  Creatinine < 2 times ULN OR creatinine clearance or glomerular filtration rate > 50%
             of the lower limit of normal

          -  LVEF > 45% OR shortening fraction > 20%

          -  Not pregnant or nursing

          -  Negative pregnancy test

          -  Fertile patients must use effective contraception

          -  No active infection, defined as absence of an infectious diagnosis or (in patients who
             have had a recent positive infectious diagnosis) the resolution of fever,
             documentation of negative cultures or antigen testing, continuation or completion of a
             course of appropriate therapy, and presence of stable to resolving clinical symptoms

          -  No evidence of HIV infection OR known HIV positivity NOTE: *Does not apply if liver is
             involved with disease

        PRIOR CONCURRENT THERAPY:

          -  See Disease Characteristics

          -  No prior stem cell transplantation

          -  No other concurrent immunosuppressive therapy