DISEASE CHARACTERISTICS:

• Histologically confirmed colon or rectal cancer

  • Metastatic or unresectable disease

• Unidimensionally measurable disease required for phase II only

  • At least 20 mm by x-ray, CT scan, MRI, or photography

  • The following are not considered measurable:

    • Pleural effusion or ascites
    • Osteoblastic lesions
    • Evidence of disease on bone scan alone
    • Progressive irradiated lesions alone
    • Bone marrow involvement
    • Brain metastases
    • Malignant hepatomegaly by physical exam alone
    • Chemical markers (e.g., carcinoembryonic antigen)

  • Recurrent disease after surgery or radiotherapy is considered measurable as long as the following criteria are met:

    • At least 4 weeks since prior surgery or radiotherapy
    • Measurable disease exists outside the radiation port or clear progression exists within the radiation port
• Tissue accessible for immunohistochemical evidence of epidermal growth factor receptor expression from a metastatic site (phase II only)
• No known brain metastases

PATIENT CHARACTERISTICS:

Age

• 18 and over

Performance status

• ECOG 0-2 OR
• Karnofsky 60-100%

Life expectancy

• More than 3 months

Hematopoietic

• WBC at least 3,000/mm^3
• Absolute neutrophil count at least 1,500/mm^3
• Platelet count at least 100,000/mm^3

Hepatic

• Bilirubin normal
• AST/ALT no greater than 2.5 times upper limit of normal

Renal

• Creatinine normal OR
• Creatinine clearance at least 60 mL/min

Cardiovascular

• No unstable angina pectoris
• No symptomatic congestive heart failure
• No cardiac arrhythmia
• No uncontrolled hypertension (systolic blood pressure greater than 150 mm Hg)

Opthalmic

• No abnormalities of the cornea (e.g., severe dry eye syndrome or Sjogren's syndrome)
• No congenital abnormality (e.g., Fuch's dystrophy)
• No abnormal slit-lamp examination using vital dye (e.g., fluorescein or Bengal-Rose)
• No abnormal corneal sensitivity test (e.g., Schirmer test or similar tear-production test)
• Mild dry eye syndrome allowed if patient can use artificial tears and ophthalmologist concurs

Gastrointestinal

• No gastrointestinal tract disease resulting in an inability to take oral medication or a requirement for IV alimentation
• No active peptic ulcer disease

Other

• Must be able and willing to undergo a mediport insertion
• Not pregnant or nursing
• Negative pregnancy test
• Fertile patients must use effective contraception
• No other malignancy within the past 5 years except previously excised and inactive basal cell or squamous cell skin cancer
• No prior allergic reactions attributed to compounds of similar chemical or biological composition to erlotinib or other study drugs (e.g., epidermal growth factor inhibitors like cetuximab)
• No significant traumatic injury within the past 3 weeks
• No peripheral neuropathy grade 2 or greater
• No ongoing or active infection
• No other uncontrolled concurrent illness that would preclude study entry
• No psychiatric illness or social situation that would preclude study compliance

PRIOR CONCURRENT THERAPY:

Biologic therapy

• Not specified

Chemotherapy

• More than 4 weeks since prior chemotherapy (6 weeks for nitrosoureas or mitomycin) and recovered

• Phase I:

  • Prior chemotherapy allowed

• Phase II:

  • No prior chemotherapy for metastatic disease
  • Prior adjuvant therapy allowed if disease progresses during adjuvant therapy
  • No prior oxaliplatin

Endocrine therapy

• Not specified

Radiotherapy

• See Disease Characteristics
• More than 4 weeks since prior radiotherapy and recovered

Surgery

• See Disease Characteristics
• More than 3 weeks since prior major surgery and recovered
• No prior surgical procedures affecting absorption

Other

• No other concurrent investigational agents
• No other concurrent anticancer agents or therapies (commercial or investigational)
• No concurrent combination antiretroviral therapy for HIV-positive patients