We present a complete POSS II-based refinement of the optical morphologies for galaxies in the Karatchenseva's Catalog of Isolated Galaxies that forms the basis of the AMIGA project. Comparison with independent classifications made for an SDSS overlap sample of more than 200 galaxies confirms the reliability of the early vs. late-type discrimination and the accuracy of spiral subtypes within DeltaT = 1-2. CCD images taken at the OSN were also used to solve ambiguities. 193 galaxies are flagged for the presence of nearby companions or signs of distortion likely due to interaction. This most isolated sample of galaxies in the local Universe is dominated by 2 populations: 1) 82% spirals (Sa-Sd) with the bulk being luminous systems with small bulges (63% between types Sb-Sc) and 2) a significant population of early-type E-S0 galaxies (14%). Most of the types later than Sd are low luminosity galaxies concentrated in the local supercluster where isolation is difficult to evaluate. The late-type spiral majority of the sample spans a luminosity range M_B-corr = -18 to -22 mag. Few of the E/S0 population are more luminous than -21.0 marking an absence of, an often sought, super L* merger (eg fossil elliptical) population. The rarity of high luminosity systems results in a fainter derived M* for this population compared to the spiral optical luminosity function (OLF). The E-S0 population is from 0.2 to 0.6 mag fainter depending how the sample is defined. This marks the AMIGA sample as almost unique among samples that compare early and late-type OLFs separately. In other samples, which always involve galaxies in higher density environments, M*(E/S0) is almost always 0.3-0.5 mag brighter than M*(S), presumably reflecting a stronger correlation between M* and environmental density for early-type galaxies.