Regarding Mustasch:
I'ts a silly name but it fits their sound perfectly. It's hairy and masculine and probably smells like whiskey.
Regarding Porcupine Tree:
Correct me if i'm wrong, but I think the reason they used that name for their project is because they had initially planned PT to be a sort of joke/parody type thing and didn't expect to record more than a couple albums worth of material. It's still a ridiculous name, no matter how you go about it though.
@J. Golden
You do talk about it a lot; Same joke not funny fifteen times, ya dig? Though I think MM's little lashout there was uncalled for.
Some bad band names:
Alabama Thunderpussy (And related to the bad alabama jokes!)
Subway to Sally
Stolen Babies
Rotting Christ
My Dying Bride
Septic Flesh (really, any band name that uses the two word vile body condition formula)
Old Man's Child
Oceans of Sadness
Bambi Molesters
Chicken No Head
Magic Elf
those last two are slightly more obscure than the rest; with the former being a somewhat jazzy, pork soda inspired job with a great recipie for fried chicken in the liner notes; and the latter being more inspired by the Dixie Dregs, only significantly less boring and much heavier; it's pretty much instrumental wank, and if you're into that sort of stuff, worth seeking out.
There's more but i'm too lazy to think of them right now. All of these are (IMO) great bands, but their names always make me lol pretty hard.