This was posted on Audio Karma from Beattles Rarities:
"In mid-1966 Capitol Records put together The Beatles Yesterday And Today album using various singles and songs left off earlier albums (common practice in those days). The photo for the album cover was sent from England (where the album wasn't released). The picture (shown inside) had the group dressed in butcher smocks and holding chunks of bloody meat and decapitated baby dolls. Capitol actually released a number of albums for retail sale with this cover (the amount varies in estimation from 6,000 to 60,000), but public outcry was so negative that some record stores were afraid to stock the album. This led to Capitol scrapping hundreds of thousands of album jackets. The company switched to a different shot of the group in a hotel room with a steamer trunk (see photo inside). This picture was almost used as it appears here, but at the last minute the background was airbrushed to the plain white that has adorned the Yesterday And Today album ever since. The new picture was pasted over a few of the old 'butcher cover' jackets and when the word got out many fans tried peeling or steaming the new cover off so they would have one of the original copies. Meanwhile, the 'butcher cover' became one of the most sought-after prizes for every Beatles collector. So few copies were distributed that many of today's fans had never even seen the famous and controversial picture which is why it is included in Rarities. When the shot was used on the original cover, it was cropped at the knee level. Now for the first time, the entire butcher photo is reproduced."
Questions posted in the auction listing indicate the album is found in 3 states.
1st state = original Butcher cover
2nd state = new cover pasted over old cover
3rd state = new cover steamed \ pealed of exposing the original Butcher cover
Mitch