I have been accused of confusion over the nature of the ISAAC algorithm. The bulk of evidence suggests that it is a cryptographically strong pseudo random number generator. By bulk I mean the number of authoritative references pointed to by a Google search of "isaac prng cipher". I offer:-
In fact, the only place that describes ISAAC as definitely a cipher is crypto.SE and the Wikipedia article and we all know the authority that can be attributed to Wikipedia.
Yuen's book is perhaps the most telling. It clearly categorises ISAAC as a PRNG but then goes onto construct a cipher system using it as a key stream generator. Yuen goes into great detail how to create a seeding mechanism as there is no official key entry, and codes an XOR mechanism for enciphering. This approach is repeated in the Rosetta Code entry for ISAAC, as is the description of ISAAC as a PRNG.
It appears to be the case that ISAAC is a PRNG. As such, and as any PRNG can, that qualifies it to be a building block of a cipher. In that respect, so can the middle square method be used as a construct within a cipher system if you add some XOR code onto the end. I suggest that is the basis of all of the confusion. But ISAAC is first and foremost a PRNG, isn't it?