Kris Doolan's goal in the 19th minute had the Jags in front before Inverness were denied an equaliser when Ross Draper was adjudged by the linesman to have touched the ball twice at a corner in the build-up to Aaron Doran scoring.
Gary Warren did level the match up in the 46th minute and they felt they should have been in front when Richie Foran had a header chalked off.
Doolan then befitted from a mistake by Caley Thistle goalkeeper Dean Brill to strike what proved to be the winner eight minutes from time, ending the hosts' 100 per cent record at home this season in the process.
The result was a sore one to take for Butcher, who could scarcely believe his side had not taken something from the match.
He said: "I'm very disappointed that we've not won the game.
"It was a bizarre game. We dominated for large parts, but our final pass or final touch in and around the box let us down at times.
"Ross Draper has put the ball down and taken the corner to Aaron Doran and the linesman has said it was okay.
"It seemed to be an eternity between the corner being taken to Aaron Doran scoring and then the goal being disallowed, but the linesman has then said that the ball had been touched twice."