Lenalidomide in Treating Patients With AIDS-Associated Kaposi's Sarcoma

Inclusion Criteria: * Biopsy-proven KS involving skin with or without visceral involvement either newly diagnosed or refractory to or intolerant of one or more prior therapies * Patients must have cutaneous lesion(s) amenable to four 3 mm tumor biopsies during the study (either 4 separate lesions measuring \> 4 mm each OR 2 separate lesions measuring \> 8 mm each) and at least five additional lesions measurable for assessment with no improvement over the past month * Serologic documentation of HIV infection by any of the Food and Drug Administration (FDA)-approved tests * Karnofsky performance status \>= 60% * Hemoglobin \>= 8 g/dL * Absolute neutrophil count (ANC) \>= 1,000 cells/mm\^3 * Platelet count \>= 100,000/mm\^3 * Calculated (method of Cockcroft-Gault) creatinine clearance (CrCl) \>= 60 mL/min in the Phase I and CrCl \>= 30 mL/min in the Phase II (creatinine clearance may also be obtained by the 24-hour collection method at the investigator's discretion) * Total bilirubin should be =\< 1.5x upper limit of normal (ULN); if, however, the elevated bilirubin is felt to be secondary to Atazanavir therapy, patients will be allowed to enroll on protocol if the total bilirubin is =\< 3.5 mg/dL provided that the direct bilirubin is normal * Aspartate aminotransferase (AST) (serum glutamic oxaloacetic transaminase \[SGOT\]) and alanine aminotransferase (ALT) (serum glutamic pyruvic transaminase \[SGPT\]) =\< 3x ULN * Life expectancy \>= 3 months * Ability and willingness to g…