Modified DNA bases in Pymol and Coot
I got the answer on a Pymol listserve:

Yes, it can be done in Pymol.

Choose the residue you want to mutate from cytosine to 5-methylcytosine.
Use Action -  Hydrogens - Add function to add hydrogens.
Change mouse selection to choose atoms.  

Click on the hydrogen you want to replace.

Click builder (there is more work to do if you're on a Mac, see below) to open builder window.

Click C

If you're on a Mac, you won't have Builder functionality unless you change your MacPyMOL.app file name to PyMOLX11Hybrid.app