I would have thought it was a joke if I hadn't stumbled across this peak while looking at some maps. If you have any idea, you should tell us how the name came about - possibly more interesting than climbing it!
The origins aren't nearly as colorful as the name would suggest. According to "California Place Names: The Origin and Etymology of Current Geographical Names" by Erwin Gustav Gudde, Butt Mountain, creek, valley, and reservoir were all named after a miner in Plumas County named Horace Butts.
"Got tight last night on absinthe and did knife tricks. Great success shooting the knife into the piano. The woodworms are so bad and eat hell out of all furniture that you can always claim the woodworms did it."