The soldiers are isolated because they are wounded, scarred, and in some cases (the soldier without a nose) noticeably deformed. Although they may be treated like heroes, they probably can't help but feel outcast because of their injuries; and also, being around war and death could cause mental isolation. The narrator is further isolated from his fellow soldiers because he got his medals for "being an American." The indication is that he was injured accidentally, and the other soldiers actually performed some heroic acts. Once they are aware of this, they treat him cordially, but not with the same respect.
The isolation is showcased even more with the recuperative machines. The narrator understands that these soldiers were the first to use these experimental machines (despite the fact that the doctors have successful 'before and after' pictures to boost soldier's spirits). So, they are, essentially: guinea pigs, depriving them of their humanity even more. Once the major loses his wife, having no faith in the machines, he resigns himself to staring out the window.
The coupling of soldier-machine is almost futuristic. With medical science having run out of ideas, and/or caretakers having done all they can, these scarred soldiers are to put their hope and reliance in a cold, lifeless machine. And judging by the major's skepticism and narrator's intimation that the pictures might be fake (since they were the first to use the machines), the machines probably don't even work. They are left with false hope in some metal (pun intended on 'medal').