My analysis didn't really go deep (pun unintended) into the details of how the information might be encoded, but taking a cue from what you'd said, position can be encoded into six bits: 000;000 would be a1 (white king's rook starting position, right?) and h8 would be 111;111 b4 would then be 001;011. Perhaps we can save things into just three bits (there are just seven unique pieces in chess: pawn, rook, knight, white bishop, black bishop, queen, and king) if we just need to communicate which piece is to be moved. Maximally, the accomplice can communicate both the piece and the destination in nine bits, though following this discussion, it seems there's not much need for it, and it'd introduce complexities that would hamper comprehension (like having to distinguish between the three cases so far: position of the piece to be moved, the piece to be moved, or the piece to be moved and the location of the destination).
As for how to send information (as opposed to receiving), there's only one signal that would be needed, if the accomplice is watching a live feed of the match: "Help!" which would be a continuous anal clench, or something fanciful as clenching SOS to avoid any random anal clenching to be mistaken for a call for help.
Now, as for a cheating device inside a butt plug not triggering a metal detector, I don't know for certain, but I've got no reason to disbelieve you. If there's someone that manages to pull it off though (the entire thing, sneaking in a device up their butt and using it to cheat at live chess competitions), I'd love to hear about the details.