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It appears that Mutt does not spawn at his ultimate location until you have done the first part of his quest (which is fairly straightforward).
So you have to complete the quest "Find out what happened to Mutt", then have it progress to "Go and ask the herbwoman about Mutt". You don't have to go see the herbwoman. You can go straight to Mutt's ultimate location and he will have spawned.
After you get Mutt, the quest is marked as complete. This means that you are no longer led through the usual quest chain to get Mutt, although I expect some of the quests are still present, but no longer linked to Mutt. I'm not 100% about that.