"set bootdevice "Morphos"" is wrong!
you have to set the DEVICE name (not the volume name)
this is the line you have to correct:
set bootdevice "bootdevice=HD1"
Edit- and if this ISO is the latest available, you have to replace a broken component in:
SYS:Boot/roms/module.com1
Use the "module.com1.idehack" instead (rename it to module.com1)