It's possible that Martha didn't die 1810-20, but was instead divorced from Isaac.  If so, it's easier to explain why her children did not move to Indiana with Isaac, but stayed in Virginia with her.

For John and Mary to have married in Washington Co., VA, Isaac II must have left these children of his first marriage behind when he moved to Indiana.  As for Isaac III, I can only surmise that he stayed behind, too, then made his own way to Sullivan Co., TN, as an adult.

1a.  Jordan R. Dodd, ed.  1993.  Virginia Marriages:  Early to 1850.  Liahona Research, Orem, UT (Broderbund CD-229):

Newhouse, Isaac

Mccullock, Martha

21 Jun 1798

Washington Co.

1b.  Lewis Preston Summers.  1929.  Annals of Southwest Virginia, 1769-1800.  Abingdon, VA (reprinted 1970 by Genealogical Publ. C., Baltimore, MD; online at Ancestry.com):

Part 2	p. 1267	WASHINGTON COUNTY	MARRIAGES
DATE	GROOM	BRIDE	MINISTER
1798, June 21	Newhouse, Isaac	Martha McCullock	Charles Cummings

1c.  Jordan R. Dodd, ed.  1993.  Illinois/Indiana Marriages:  Early to 1850.  Liahona Research, Orem, UT (Broderbund CD-228):

Newhouse, Isaac

Sandefer, Wineferd

12 Sep 1820

Fayette Co.

2.  1800 Census Index/Images (online at Ancestry.com):  the 1800 Virginia census was destroyed.

3.  The 1806 Washington County, Virginia, Personal Property Tax List (online at newrivernotes.com; transcribed by Jeffery C. Weaver):

Name	Whites	Blacks<16	Blacks>16	Horses
Newhouse, Isaac	1	-	-	2

4.  1810 Census Index/Images (online at Ancestry.com, Image #16 of 73 — indexed "Newham"; extracted by Diana Gale Matthiesen):¤•

1810

VA

Washington Co.

Roll 71

p. 208B/704

Ln. 25

Isaac Newhouse

20010-10010-00

These data indicate:

No. & Sex	Age Class	Therefore Born	Individuals Inferred
2 males	9 or under	1800-1810	= John (b. 1806/7) = Isaac III (b. 1801/2)
1 male	26-44	1765-1784	= Isaac II (b. ca. 1775)
1 female	9 or under	1800-1810	= Mary (b. 1808/9)
1 female	26-44	1765-1784	= Martha (b. ca. 1779)

5.  1820 Census Index/Images (online at Ancestry.com):  can't find, which supports that our subject is a widower living with another family (i.e., is not a head-of-household).  He's presumably in Fayette Co., IN, because that's where three of his siblings are living (viz., John NEWHOUSE, James NEWHOUSE, and Mary (NEWHOUSE) SERGEANT) and that's where he remarries on 12 Sep 1820.  [John and James are the only NEWHOUSEs in all of Indiana.]

6.  1830 Census Index/Images (online at Ancestry.com):  The four Isaac NEWHOUSEs in the U.S. Census are all otherwise accounted for, so it appears out subject is deceased.  Our subject's son, Isaac III, is married and living in Sullivan Co., TN.  Our subject's son, John NEWHOUSE, is married and living in Washington Co., VA.  Our subject's daughter, Mary, is married and living in Washington Co., VA, with her husband, James CLARK

7.  LDS.  Family Search: Internet Genealogy Service: Pedigree Resource File (index to CDs, online at FamilySearch.org).