How to create ISO from Application Bundle
Right-click your "Install OS X Mountain Lion.app" file and select "Show Package Contents".
Open Contents/SharedSupport and then you will find InstallESD.dmg.

Copy this file to your Desktop. This is the file that you need to burn OS X to a DVD. You need a Dual Layer DVD to burn OS X/or just use a USB flash drive.

It isn't an ISO, but you can convert to a 'cdr' from Disk Utility. A 'cdr' file is the same as an 'iso' AFAIK, and you can rename the extension so that it is an ISO.