Photodissociation of ICN by W excitation in solid and liquid Ar is studied by molecular dynamics simulations. The focus is on the differences between the cage effects on the CN photoproduct in the two phases, and on the excited state isomerization ICN* --> INC* dynamics in the solid matrix. Nonadiabatic transitions are neglected in this first study. The main results are : (1) No cage exit of the CN product is found in solid Ar, even in simulations at temperatures close to melting and for large excess energies. The result is in accord with recent experiments by Fraenkel and Haas. This should be contrasted with the large cage-exit probabilities found in many systems for atomic photofragments. The result is interpreted in terms of geometric and energy transfer considerations. It is predicted that complete caging of diatomic and larger photofragments will be typically the case for photodissociation in rare-gas matrices. (2) Almost 100% cage-exit probability for the CN product is found for ICN photolysis on the (II1)-I-1 potential surface in liquid Ar. On the other hand, photolysis on (II0+)-I-3 potential surface does not lead to cage exit on a time scale of 15 ps. The large differences between the reaction in the solid and in the liquid, and between the behavior of the process on the (II0+)-I-3 and the (II1)-I-1 potentials, respectively in the liquid, are interpreted. (3) CN rotational dynamics and subsequent relaxation leads to isomerization int he excited electronic states. On the (II0+)-I-3 potential surface one finds after t greater than or similar to 0.5 ps roughly equal amounts of the ICN and INC isomers. On the (II1)-I-1 surfaces only INC is found after t greater than or similar to 3.5 ps. This is explained in terms of the barriers for CN rotation in the two excited states, and in terms of time scales for rotational relaxation. The results throw light on the differences between cage effects for photochemical reactions in solid and in liquid solution, and on cage-induced isomerization dynamics in solid matrices.