Arsenal Thresher does not have a -1/-1 counter on it.
Steps
Activate Cauldron of Souls by tapping it, giving Arsenal Thresher persist until end of turn.
Activate Lithatog's first ability by sacrificing Arsenal Thresher.
When Arsenal Thresher dies, its persist ability and Dross Scorpion trigger.
Resolve the Dross Scorpion trigger, untapping Cauldron of Souls.
Resolve the Arsenal Thresher trigger, returning it from your graveyard to the battlefield with a -1/-1 counter on it, and then choosing to reveal at least one artifact card from your hand to remove the -1/-1 counter.
Resolve the Lithatog ability, giving it +1/+1 until end of turn.