This phase I/II trial studies the safety, best dose and effectiveness of targeted gene therapy combined with isolated limb infusion (ILI) of melphalan and dactinomycin for treating patients with advanced extremity melanoma that cannot be removed by surgery. Adding gene therapy to a standard chemotherapy regimen in the isolated limb may enhance anti-cancer effects by inducing a systemic immune response against the tumor cells.

Inclusion Criteria:

• Patient must have histologically or cytologically confirmed diagnosis of melanoma with advanced, unresectable primary or in transit metastasis
• Patient must have measurable disease defined as lesions that can be accurately measured in at least one dimension (longest diameter to be recorded) as >= 10 mm with caliper measurement for superficial lesions or computed tomography (CT) scan for deeper lesions; additionally, patients must have no evidence of disease beyond the affected extremity on positron emission tomography (PET)/CT scan
• Patients may have undergone any previous systemic chemotherapy with a treatment free period of > 4 weeks prior to enrolling on this clinical trial
• Patient must be > 18 years of age.-Patient must have an Eastern Cooperative Oncology Group (ECOG) performance status =< 2, Karnofsky >= 60%
• Leukocytes >= 3,000/mcL
• Absolute neutrophil count >= 1,500/mcL
• Platelets >= 100,000/mcL
• Total bilirubin =< 1.5 x institutional upper limit of normal (IULN)
• Aspartate aminotransferase (AST) (serum glutamic oxaloacetic transaminase [SGOT])/alanine aminotransferase (ALT) (serum glutamate pyruvate transaminase [SGPT]) =< 3.0 x IULN
• Creatinine within normal institutional limits
• OR creatinine clearance >= 60 mL/min/1.73 m^2 for patients with creatinine levels above institutional normal
• Women of childbearing potential and men must agree to use adequate contraception (hormonal or barrier method of birth control, abstinence) prior to study entry and for the duration of study participation; should a woman become pregnant or suspect she is pregnant while participating in this study, she must inform her treating physician immediately
• Patient (or legally authorized representative if applicable) must be able to understand and willing to sign an institutional review board (IRB) approved written informed consent document

Exclusion Criteria:

• Patients must not have had previous oncolytic viral therapy
• Patient must not be receiving any other investigational agents
• Patient must not have known brain metastases; patients with known brain metastases must be excluded from this clinical trial because of their poor prognosis and because they often develop progressive neurologic dysfunction that would confound the evaluation of neurologic and other adverse events
• Patient must not have a history of allergic reactions attributed to compounds of similar chemical or biologic composition to melphalan or dactinomycin or other agents used in the study
• Patient must not have an uncontrolled intercurrent illness including, but not limited to, ongoing or active infection, symptomatic congestive heart failure, unstable angina pectoris, cardiac arrhythmia, or psychiatric illness/social situations that would limit compliance with study requirements
• Patient must not be pregnant and/or breastfeeding
• Patient must not be known to be human immunodeficiency virus (HIV)-positive or otherwise immunocompromised (i.e., patient has undergone organ/bone marrow transplant on immunosuppression, patient is or has recently undergone treatment with toxic chemotherapy for another malignancy, etc.) as there is a risk of complications in the use of adenovirus therapy in these patients