Reiskguard knight with 1 damage on it declares as a defender against an attacker who has horrific mutation attached, Does he get to assign counterstrike damage before he dies to the mutation?

The timing on here is tricky, but I'd have to say yes. Counterstrike says it immediately deals damage equal to its numeric value as soon as the unit is declared as a defender. I'd say this means that two damage is immediately applied before Horrific Mutation sends the Knights out of play... which should be the very next thing that happens. I expect the fact to clear this up with a flowchart.

On the other hand, the Knights are also killed immediately when they are declared as a defender since they now have damage equal to their (reduced) hit points. Horrific Mutation is not a forced ability or anything else that needs to be activated, so the timing window for both the unit dying and conterattck kicking in are identical.

In situations like this we've tended to assume that the active player decides the order of resolution, and I assume the attacker would prefer that the unit died rather than counterattacked.

Definitely one for the FAQ though.