I realise you've been waiting about a year for an answer to this, and I only joined this forum so I could answer your question! I was googling woodcave myself, to see if anyone had any recordings and your post is the only thing that comes up.
YES, John did have a band called Woodcave. I distinctly remember a gig in 1997 - May 1st in fact) when his band played (at a gig I organised as a fundraiser for a project called 'The Australia Dreaming Project' which was to help streetkids). I have a newspaper ad cut out from Xpress Magazine advertising that night.
'Woodcave' played, so did 'Motherfunk' who headlined that night (two members of which went on to become separate soloists - Carus Thompson (Carus and the True Believers), and Loren Dent (Loren)...both rather successful in their own right. Paul Keenan the drummer went on to play for Eskimo Joe and Sleepy Jackson among others). Rowan Logie was the bass player, not sure what happened to him). My own band, Shirley's Cat (very short lived!) played, as did a few others including a band called Proof, Sam Podeu and The Custard Divas, and local band Derridgef, who were very big at the time - they played African drums and were AMAZING.
It was a special gig that night at the Ozone Bar in Northbridge, as this was around the time of the beginning of the Forest Blockade, to protect Giblett Block, near Pemberton, a forest now saved with the efforts of alot of West Australian people. I do remember John visiting the blockade back then. It was a pretty special year.
How do I know all this? That gig (and the forest blockade) feature in my first novel, titled 'Cappuccino Diva'. This is not a promo for my book as that book is long out of print (but available from me if you want a copy), and really only in the hands of those who remember 1997 in Fremantle as a special year. That book details a year in the life of Fremantle when we seemed to have a great year of music, people, protests, and parties...
I have very clear memories of John around that time, busking on the street, with his amp under his chair and tapping sticks tied to his shoes outside Timezone on South Terrace. I have a photo of him doing exactly that, in a box somewhere in storage if I can find it one day (us locals always said - John is so amazing, his music is just going to take off one day). A few years later, as a teacher at Pinjarra SHS in 2002, I used to tell my students - John Butler lived in Pinjarra, and look where he is today - you can do anything! And they would say - "who's John Butler?"
Occasionally he'd have a coffee at Gino's with the rest of the Freo crew...or swan past on his skateboard. I remember having great chats with him about what was wrong with the education system and what was required to fix it.
Woodcave featured John, possibly Gavin Shoesmith too (who also played in a band called 'Moustache 150' I think, at the time) a double bass, a didge and a drum (djembe).
Hope that helps!