Arduino-izing the AVR Butterfly

You should be able to use the standard butterfly bootloader.
so long as you setup the arduino software boards.txt file with the following entry

bfly.name=Butterfly

bfly.upload.protocol=butterfly
bfly.upload.maximum_size=14336
bfly.upload.speed=19200

bfly.bootloader.low_fuses=0xE2
bfly.bootloader.high_fuses=0x98
bfly.bootloader.extended_fuses=0xFF
bfly.bootloader.path=butterfly
bfly.bootloader.file=bf_boot.hex
bfly.bootloader.unlock_bits=0x3F
bfly.bootloader.lock_bits=0x0F

bfly.build.mcu=atmega169
bfly.build.f_cpu=8000000L
bfly.build.core=butterfly

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