New signing Lucas Amorosino grabbed a superb debut try as Blues went into the break 18-14 down as the boot of JJ Hanrahan kept the home side at bay.
Man-of-the-match Manoa Vosawai lit up the second half with a brilliant try on the hour before another kick from Hanrahan levelled the scores going into a tense final ten minutes.
Blues looked like they were going to take the points when Gareth Davies slotted a penalty four minutes from time.
However, in a cruel last twist for the hosts it was Butler who crashed over and ensured Blues had to settle for a losing bonus point after dominating for long periods in their best performance of the season.
An early penalty for JHanrahan put Munster ahead before Manoa Vosawai and Matthew Rees went on the charge for Blues and Adam Thomas made yards as cut inside only for his pass inside to Gavin Evans to fall forward in contact.
The game was being played at an electric pace in the opening minutes with Sam Hobbs and newcomer Amorosino involved heavily. Josh Turnbull and Vosawai went through tackles before Amorosino spotted a yard and burst through a gap before being hauled into touch.
Blues levelled the scores with a kick from Patchell on eight minutes, but a penalty for accidental offside, gave Hanrahan another kick to edge his team back ahead.
A mistake from Johne Murphy, as he sliced a kick out on the full under pressure from Lloyd Williams and Amorosino, gave Blues an attacking platform. A penalty for offside gave Patchell his second successful kick of the afternoon.
Blues were guilty of offering up kickable chances straight after going ahead and for the second time in quick succession Hanrahan put Munster back ahead within minutes.
Referee Marius Mitrea then incensed the home crowd with a harsh call on Blues as they looked to counter ruck after driving Munster back of the ball. Hanrahan, though, was not in a forgiving mood as he slotted his fourth kick of the game.
Josh Navidi swooped on loose play by Munster to win a penalty for holding on and Patchell continued the kicking war as he knocked over his third penalty of the match.
A superb high take and break into space from Amorosino showed all the Argentine’s class before Blues looked to go wide right at pace. But the momentum was lost and a high tackle against Hobbs saw Hanrahan pierce the posts.
Blues needed inspiration and it came just after the half hour when Williams broke and fed Patchell on his shoulder. The full back ran at the final man before delivering the perfect flat pass to send Amorosino over to cut the lead to 15-14.
With their tails up, Richard Smith produced a sublime break from deep to make 40 metres.
But back came Munster and, after an initial break from the returning Robin Copeland, another penalty from Hanrahan put them four points ahead.
One last attack before the break saw Smith hauled back with a high tackle and the penalty awarded. Patchell lined up the final kick of the first 40 minutes, but pushed his effort wide right of the target.
The second half picked up where the first left off with Amorosino short with an audacious drop goal before Munster broke and Patchell mopped up the danger under intense pressure from Gerhard van den Heever and Rory Scannell.
Vosawai bulldozed down the middle to fire Blues back onto the front foot before the ball was spun wide to Patchell and Gavin Evans who rattled up close. Williams picked up but his pass to Filo Paulo failed to find hands and the chance was gone.
A huge scrum from Blues forced Munster off their own ball to huge cheers from the home crowd.
A limping Patchell was replaced by Dan Fish before the hour mark before a series of scrums saw Munster repeatedly pushed back before Vosawai picked up and Blues lost the ball as they closed in for a huge escape for the Irish province.
The home side were starting to dominate the set piece as another driving maul pushed the visitors back only for the ball to spill out and be hacked away.
Gareth Davies pinned Munster back with a great kick over the head of Murphy. The visitors compounded the mistake by missing the lineout.
The try then came as Vosawai picked up at the base of the scrum and produced a quite stunning run through tackles to crash over with three men hanging off him. Davies added the extras and Blues led 21-18 for a first lead.
Hanrahan turned down a kick at the posts to go for the corner as Munster looked for a response as Blues were caught trying to run the ball from deep. But after the initial drive was repelled, the Munster men claimed another penalty and this time Hanrahan increased his personal haul.
The game was being played on a knife edge with a drop goal by Adam Jones incredibly almost flying over before a penalty gave Davies the kick to nudge Blues ahead.
Munster, by comparison, opted not to go for the posts after winning a penalty and instead went to the corner. The visiting pack rumbled to the line but then spilled as they peeled off the back.
However, a sensational run by van den Heever put Munster back on the attack and the visitors broke home hearts with three minutes left as Butler crashed over the whitewash.
03m Hanrahan p 0-3
08m Patchell p 3-3
11m Hanrahan p 3-6
14m Patchell p 6-6
16m Hanrahan p 6-9
20m Hanrahan p 6-12
25m Patchell p 9-12
33m Hanrahan p 9-15
35m Amorosino t 14-15
39m Hanrahan p 14-18
63m Vosawai t Davies c 21-18
69m Hanrahan p 21-21
74m Davies p 24-21
78m Butler t Holland c 24-28
Cardiff Blues: 15 Rhys Patchell (Fish 52), 14 Richard Smith, 13 Adam Thomas, 12 Gavin Evans, 11 Lucas Amorosino (Fish 39-40), 10 Gareth Davies, 9 Lloyd Williams (Jones 74), 1 Sam Hobbs, 2 Matthew Rees (Rees 58), 3 Adam Jones, 4 Jarrad Hoeata (Cook 61), 5 Filo Paulo, 6 Josh Turnbull, 7 Josh Navidi (Jenkins 74), 8 Manoa Vosawai
Replacements: 16 Kristian Dacey, 17 Thomas Davies, 18 Taufa’ao Filise, 19 Macauley Cook, 20 Ellis Jenkins, 21 Lewis Jones, 22 Garyn Smith, 23 Dan Fish