Returning an .iso file to its former file extension, is something that's isn't normally done.
And yes SNGX, you could certainly "mount" the file with a CD/DVD emulator. IMO, it's much easier, (and safer, with respect to the threat of malware), to find a free DVD ripper, than an emulator program. (I've been looking for a free one of those, that will work with windows 7 myself. Also I'd like to be able to mount some of my ancient CD games with it, such as "M$ FS-2004 ).
So, the years and years old, (freeware) "DVD Decrypter", (available here at TS) will print the .iso, then enable you to create a DVD-Video folder. If the folder is in other video formats, then a simple "copy and paste" operation will place the files on the HDD, where you would then be able to convert them to whatever format your little heart may desire.
Oh, and the print to DVD, then re-rip to folder, or copy and paste operation would be lossless.
All that remains is to decide is which freebie video file converter would get the go ahead to create the wanted .avi files.