Does ethanol react with potassium to form potassium ethanolate and hydrogen gas?
You can view water as the simplest alcohol, and indeed, water reacts with all of the Group 1 metals to form hydrogen gas and the corresponding metal hydroxide according to the following equation

$\ce{2M + 2HOH -&gt; 2MOH + H2}$

where $\ce{M}$ is the metal.  

The same reaction occurs with simple alcohols to produce the corresponding metal alkoxide and hydrogen gas

$\ce{2M + 2ROH -&gt; 2MOR + H2}$

As you increase the hydrocarbon portion of the alcohol, or reduce accessibility to the $\ce{OH}$ portion of the alcohol (e.g. make the alcohol less like water), you slow down the rate of the reaction.  

Here is a nice link that compares and discusses the relative reactivities of the Group 1 metals with water.