Inclusion Criteria

DISEASE CHARACTERISTICS:

- Histologically confirmed adenocarcinoma of the prostate meeting any of the following
criteria for high-risk disease:

- Clinical stage II or III (T2b, T2c, or T3 with any grade or prostate-specific
antigen [PSA])

- Gleason score 7 (4+3 only) or ≥ 8 (any stage or PSA)

- Serum PSA ≥ 10 ng/dL (any grade or stage)

- Any stage, PSA, or Gleason score with ≥ 35% chance of biochemical failure at 5
years based on Kattan's nomogram

- No clinical evidence of CNS metastases

- No metastatic disease as demonstrated by radiological exam (CT scan, MRI, bone scan,
x-ray) within 8 weeks of study entry

- Appropriate medical candidate for radical prostatectomy

PATIENT CHARACTERISTICS:

- ECOG performance status 0-1

- Creatinine ≤ 2.0 mg/dL

- Granulocyte count ≥ 1,800/mm³

- Platelet count ≥ 100,000/mm³

- AST < 3 times upper limit of normal

- Bilirubin ≤ 1.5 mg/dL

- Fertile patients must use effective contraception during and for 4 weeks after
completion of study treatment

- No active unresolved infection

- No pre-existing peripheral neuropathy > grade 1

- No known HIV positivity

- No other malignancy within the past 5 years except curatively treated basal cell or
squamous cell carcinoma of the skin or controlled Ta transitional cell carcinoma of
the bladder

- No known contraindication to sargramostim (GM-CSF) or thalidomide

PRIOR CONCURRENT THERAPY:

- No prior radiotherapy to the prostate or pelvis

- No prior chemotherapy or hormonal therapy for prostate cancer

- No parenteral antibiotics within the past 7 days