Well, I thought we figured this problem out, but I suppose I was wrong. Cheez-it has a hot-spot right next to his butt and he pulled his hair out at the same location, it looks horrible. I noticed it last night and it is in an area where it could be worms or an anal-sac problem.
I oatmeal bathed him and gave him a good furminating and E-collared him for good measure until I could take him to the vet (which doesnt open until Monday!). He has quickly learned that he can sit and "chase his tail" in a seated position to drag his butt on the floor and he is obsessively doing it. I had to crate him to get him to stop. It's driving me nuts to watch so I can only imagine how it must be for him.
I cant believe how he went from perfectly normal to "itchy-butt so bad he would chew his fur" out in a single day. Walk-in's open up at the vet at Petsmart at 3pm. Not sure if I want to take him there, but I would like to get this taken care of ASAP. Guess that is what we will do.