after a ground air assisted start of Eng 1 you must disconnect the ground air source and use bleed air from Eng 1 to start Eng 2 (ie crossbleed start)
if the isolation valve is closed then the Bleed from No 1 eng is isolated from the No 2 eng (ie unable to crossbleed start)
so thats the reason why the isolation valve switch much be placed in Auto to enable bleed from eng 1 to start eng 2.
According to boeing procedures we now put the isolation valve in open during engine start. - that doesn't sound right. It should be switched to AUTO