McGrath, I tried to trace "ass" but not much came up. Webster's Collegiate puts it first and arse second, but fails to put a reference date on ass. The OED quotes Dos Passos 1930, but that doesn't help. It is mentioned in a couple of slang dictionaries that I have, but no useful data.
I wonder if it developed through the old phrases, to "make an ass of one's self," or "to be an ass." Both of these are 16C or older (OED).
Ass as euphemism is possible, as you suggest, but no evidence.
Labor-labour. I was taught that the spelling labour, etc. became standardized in England only after the American colonies split off. I am not enough of a language historian to say whether this is correct or not.