DISEASE CHARACTERISTICS:

• Histologically confirmed colorectal cancer

  • Radiologic evidence of advanced disease

• At least 1 measurable lesion at least 20 mm OR at least 10 mm by spiral CT scan

  • Indicator lesions in a previously irradiated field are allowed provided the irradiated lesion has clearly progressed OR a new lesion has developed in the irradiated field

• Failed 1, and only 1, line of prior chemotherapy for advanced/metastatic disease

  • Disease progression during chemotherapy OR within 6 months after completion of treatment

• No symptomatic brain metastases meeting any of the following criteria:

  • Unstable
  • Inadequately controlled with fixed-dose oral steroids
  • Potentially life-threatening
  • Required radiotherapy with the past 28 days

PATIENT CHARACTERISTICS:

Age

• 18 and over

Performance status

• ECOG 0-2

Life expectancy

• Not specified

Hematopoietic

• Neutrophil count > 1,500/mm^3
• Platelet count > 100,000/mm^3

Hepatic

• AST and ALT < 2.5 times upper limit of normal (ULN) (5 times ULN if liver metastases are present)
• Bilirubin < 1.5 times ULN
• No hepatitis
• No cirrhosis

Renal

• Creatinine < 1.5 times ULN

Other

• Not pregnant
• Negative pregnancy test
• Fertile patients must use effective contraception during and for 3 months after study participation
• HIV negative
• No preexisting neuropathy ≥ grade 2
• No active or uncontrolled infection
• No other serious illness or medical condition
• No chronic alcohol abuse
• No known hypersensitivity to systemic liposomal formulations or compounds chemically related to OSI-7904L or oxaliplatin
• No prior psychiatric or neurologic condition that would preclude study compliance or giving informed consent

PRIOR CONCURRENT THERAPY:

Biologic therapy

• At least 21 days since prior immunotherapy
• At least 21 days since prior monoclonal antibody therapy

Chemotherapy

• See Disease Characteristics
• At least 21 days since prior chemotherapy and recovered*
• No prior oxaliplatin NOTE: *Alopecia allowed

Endocrine therapy

• See Disease Characteristics
• At least 21 days since prior hormonal therapy

Radiotherapy

• See Disease Characteristics
• At least 21 days since prior radiotherapy and recovered
• No prior radiotherapy to more than 25% of bone marrow reserve

Surgery

• Recovered from prior surgery

Other

• At least 21 days since prior tyrosine kinase inhibitor therapy
• More than 21 days since prior investigational agents
• No other concurrent anticancer therapy
• No other concurrent investigational agents