This phase I/II trial studies the side effects and best dose of melphalan when given together with carboplatin, mannitol, and sodium thiosulfate, and to see how well they work in treating patients with recurrent or progressive central nervous system (CNS) embryonal or germ cell tumors. Drugs used in chemotherapy, such as melphalan and carboplatin, work in different ways to stop the growth of tumor cells, either by killing the cells, by stopping them from dividing, or by stopping them from spreading. Osmotic blood-brain barrier disruption (BBBD) uses mannitol to open the blood vessels around the brain and allow cancer-killing substances to be carried directly to the brain. Sodium thiosulfate may help lessen or prevent hearing loss and toxicities in patients undergoing chemotherapy with carboplatin and BBBD. Giving melphalan together with carboplatin, mannitol, and sodium thiosulfate may be an effective treatment for recurrent or progressive CNS embryonal or germ cell tumors.