Why isn't "Comme d'habitude, je prenais un café ce matin." accepted? I figured the imparfait was in place because of the habit.
Yes, but with the ce matin it has to be j'ai pris.
Because, you can't say Ce matin je prenais un café unless you add something like quand il m'a appelé.
Comme d'habitude j'avais un cafe ce matin was marked wrong. Is it really wrong or just Duo's preferred form?
I think "to have" when talking about food has to be translated by "prendre".
No flexibility there at all?
I'm not sure, I'm not a native French speaker. But Duolingo is pretty consistent when it comes to prendre - have something to eat.
"J'avais un café" would suggest that you used to own a café:
"Ce matin, j'avais un café, mais aujourd'hui je l'ai vendu."