I've been playing with this again now. (in WinUAE)
Here is what I've tried:
1: Following instructions from your main post
2: Tried enabling RAD
3: Tried deleting the database as you suggested
4: Tried using Amiga: and CD0: in TL config (ISO volume name is 'Amiga')
5: Tried with Tinylauncher v2.1
6: Tried copying makedir and assign commands to C:
Nothing helps so far, it reboots when selecting a game, but the game still doesn't start, it just returns to TL.
You didn't give many instructions for ISOCD..
All I've done is set Volume ID to Amiga, select CD32.TM as TM file, click examine and then build the iso.
Did I miss any steps?
Hope you can figure it out, as TL would be the perfect CD32 game browser