Lenalidomide, Cytarabine, and Idarubicin in Treating Patients With Acute Myeloid Leukemia

Inclusion Criteria: * Cohort 1: Patients must be age \>= 18 and \< 65 with relapsed or refractory AML or high risk myelodysplastic syndrome (MDS); high risk MDS is defined as international prognosis scoring system (IPSS) score of 1.5 or higher; eligible patients will have a score of 1.5 or higher at any time from diagnosis to screening * Cohort 2: Patients must be age \>= 18 with previously untreated AML; favorable risk AML patients \< 60 years of age are excluded; these are defined as core binding factor (CBF) AML patients and characterized by cytogenetic or molecular evidence of CBF leukemia; untreated AML patients \< 60 years of age must be negative on screening for CBF leukemia by cytogenetic or molecular analysis (Note: Prior therapy for MDS is permitted) * Patients with secondary AML or therapy-related disease (transformed \[t\]-AML/MDS) are eligible * If the patient has co-morbid medical illness, life expectancy attributed to this must be greater than 6 months * Eastern Cooperative Oncology Group (ECOG) performance status =\< 2 * Total bilirubin \< 2.0 mg/dL * Aspartate aminotransferase (AST)/alanine aminotransferase (ALT) \< 2.5 times upper limit of normal * Creatinine \< 2.0 mg/dL AND creatinine clearance (calculated) \>= 50 mL/min * Left ventricular ejection fraction (LVEF) \>= 40% * Patients who have previously received lenalidomide, idarubicin, and/or cytarabine are eligible provided that the combination of the 3 agents has never before been administered, and …