I'll let Mr. Frazier get into the detail if he wishes but yes Andrew Johnson and General Grant after the War had some very different opinions to say the least.
When I first read about this event in the letter, my first thought was "I wonder what Grant would be thinking about this?" Oh how Grant must have laughed to himself if this did happen. For as most of you know, Grant and Buell did not see eye to eye on many occasions.
The event might have indeed happened? I don't know the particulars about Buell and Johnson however it was no great secret that Buell was fired. And if Buell was put under arrest then he must have committed some offense other than being an inept commander.
It's a topic probably worthy of some serious research.