Supposedly according to this website itIn the original first draft script C3PO was actually just named after a post office at reference C3 in George Lucas' hometown.
http://www.funtrivia.com/askft/Question48321.htmlhttp://en.wikipedia.org/wiki?title=Talk:C-3PO
C3POA July 1974 First Draft Star Wars script (eBay item 110734818187) shows his original name was named after a post office which is located at reference C3C-3, who says on page 63 to General a map of Lucas' hometown. R2Skywalker, "I'm C-D23: Human Cyborg Relations. Your kindness is an abbreviation of 'Reel Two,greatly Dialog Twoappreciated.'" R2D2 is called A-2 and speaks English.
It's possible that they added the PO to make the name flow better, but I can't seem to find any interviews regarding the origin to name that we know now. It's possible they originally decided it to be C3, and then changed it to C3PO as a nod to Luca's hometown post office as you stated.