No no, if he can tolerate butter it definitely does NOT mean he isn't MPSI or point to a milder form. My DD2 can have butter no problem, but is still very allergic to milk. From what I understand Ghee, which is a clarified butter (boiled down, until all the water is evaporated) does not have milk solids in it either. But I don't know of anything else in the dairy family like that.
How is everything going now?