As was the Velvet Underground. Thank God they changed the name. 
The Canadian power-pop band Sloan got its name from a friend’s nickname, “the slow one,” as said by his Quebecois boss.
Murderecords labelmates Thrush Hermit took their name from a local bird, the hermit thrush. And Neuseiland are named after a Dutch children’s book whose title translates as “nose island.”
Jane’s Addiction - Jane was a hooker the band knew. guess she had herself an addiction.
764-HERO – It seems like bands have to get local to get unusual names anymore. Anyone from Seattle knows the origin of local indie rock band 764-HERO’s name. The phone number is posted on highway signs encouraging drivers to tattle on people illegally using carpool lanes.
Sleater-Kinney – Sleater-Kinney is the name of a road outside of Olympia WA from where the band hails.
This Mortal Coil – from Hamlet, Act III, Scene i “For in that sleep of death what dreams may come/When we have shuffled off this mortal coil”
I don’t know why I care, since I was never a fan, but here’s what The Master has to say about the Grateful Dead.
I’d heard that the Bangles were originally called the Supersonic Bang.
Not a band name, but in 1959, a fellow by the name of Ernest Evans was introduced to Dick Clark by Fabian. Clark let Evans record a demo and brought his wife to the session, after which the Mrs. said, “You do a good Fats Domino—kind of like a chubby checker!”
Bread got their name due to the fact that the lead singer was stuck in traffic behind a bread truck. (No, I’m not a fan of them either; I heard it from a DJ.)
Strawberry Alarm Clock (of Incense and Peppermints fame) were originally known as Thee Sixpence, but their manager chose the new name as an homage to the Chocolate Watchband.
(I got that from the book that accompanied my Nuggets collection. I wonder where a lot of these bands got their names. SLA is one of the few they bothered to give an explanation for. The Electric Prunes? The Strangeloves? The Swingin’ Medallions? You’d think Dr. Teeth and the Electric Mayhem were a real band! aha, are you reading this?)