What is the size of your tile?
Edit: Never mind, here is an example with any size tile. It's a little messier to read though.
Some additional tweaks in this particular example include centering the origin tile 0,0 by ORIGINOFFSET, which is viewportwidth/2, and offsetting the mouse screen coordinate input by tile.height/2 to center the highlight, since the origin point of each tile is currently at the top of the tile instead of the center.
Basically it's still "Get the nearest isometric tile coordinate from the mouse location, and set the object position to the screen coordinates corresponding to the tile coordinates".
The main difference from orthographic projection is that any given x or y isometric position requires both an x and y input to get, while in an orthographic system you would only need an x input to map to an x coordinate, and y input for y coordinate.