“The mountain is out (today)” means that the sky is clear and Mount Hood is visible from the city of Portland. “Oh, look: the mountain is out today” was cited in Bennett Cerf’s syndicated “Try and Stop Me” newspaper column in August 1951, where he said that it was also used by Seattle citizens about Mount Rainier.
     
 
Wikipedia: Mount Hood
Mount Hood, called Wy’east by the Multnomah tribe, is a stratovolcano in the Cascade Volcanic Arc of northern Oregon. It was formed by a subduction zone and rests in the Pacific Northwest region of the United States. It is located about 50 miles (80 km) east-southeast of Portland, on the border between Clackamas and Hood River counties. In addition to being Oregon’s highest mountain, it is one of the loftiest mountains in the nation based on its prominence.
   
City Dictionary—Portland, OR
Mountain is Out, The
While “the mountain is out” literally means that you can see Mount Hood from the city, it generally implies that it’s a nice day out, with nothing in the sky to obscure spectacular views of the mountain.
Posted by: Anonymous on Sep 25, 2009
 
15 August 1951, Rockford (IL) Register-Republic, “Try and Stop Me” by Bennett Cerf, pg. 2B, col. 7:
When Seattle folk can see Mount Rainier or when Mount Hood is visible to the citizens of Portland, incidentally, the common phrase is, “Oh, look: the mountain is out today.”
 
21 May 1989, Aberdeen (SD) American News, pg. 1E, col. 5:
Mount Rainier
When people in Seattle say “The Mountain is out,” that means it’s a rare clear day. It happens maybe once a week, when the clouds lifet and the massive peak 95 miles away dominates the southeastern horizon.
   
Google Books
Greater Portland:
Urban Life and Landscape in the Pacific Northwest
By Carl Abbott
Philadelphia, PA: University of Pennsylvania Press
2001
Pg. 17:
“The mountain is out,” we say when the winter clouds clear and Mount Hood shimmers white in the afternoon sun.
 
Google Books
Wicked Good Words:
From Johnnycakes to Jug Handles, a Roundup of America’s Regionalisms
By Mim Harrison
New York, NY: Perigee Books
2011
Pg. ?:
the mountain is out today. What Seattleites say on days they can see Mount Rainier.
(...)
Not so fast, say Portlanders. They’ve been known to say the same thing about Oregon’s Mount Hood in their equally misty city. Oregon weather forecasters will sometimes announce a sunbreak, a rare occurrence in parts of the state.