Why does elemental Iodine form a brown solution with Ethanol but not with Isopropyl alcohol? Although it is not the standard procedure for making iodine solution, I have dissolves pure Iodine granules in Ethanol to produce a brown solution which will produce a positive test for starch by creating a purple color. 

I tried to create the same solution with isopropyl alcohol but it doesn't work.  The Iodine does not dissolve noticeably, and whatever small amount may be dissolved does not complex with starch.

How does Ethanol dissolve elemental Iodine so well especially compared to Isopropyl alcohol?
While iodine is readily soluble in ethanol and isopropanol, it is only soluble to about 300 ppm in water. I think it's pretty clear that the 30% water in your isopropanol solution was plenty to thoroughly inhibit the iodine's solubility.