Why so complicated:

Download iso, copy propper boot.img to boot-partition and then copy complete MorphOS-directory to your System-Partition (drag&drop). Click away error-massages for used skin-files (they mostly dont chance, so they are'nt necessary to copy).
Otherwise you can update them later (never had to do that since MSO2.x).
Then reboot and copy all other files you need from outside the MorphOS-directory (on ISO) to your Systempartition. You need only to copy updated files (most of them are not) - read docs!