1/3 lb. white chocolate
1 c. butter
4 eggs, separated
1 1/2 tsp. baking powder
1/2 tsp. salt
1 tsp. vanilla
1 can (3 1/2 oz.) flaked coconut
1/2 c. water
2 c. sugar
2 1/2 c. sifted cake flour
1 c. buttermilk
1 c. chopped pecans or almonds

Place chocolate and water in top of double boiler; heat over hot water until melted. Beat with wire whisk until blended; cool. Cream butter and 1 1/2 cups sugar until light and fluffy. Add egg yolks, beat thoroughly. Sift flour with baking powder and salt; add to creamed mixture in thirds alternately with buttermilk, vanilla, and chocolate--beating until smooth after each addition. Beat egg whites until soft peaks form. Gradually add remaining 1/2 cup sugar, continuing beating until stiff but not dry. Fold into batter; then gently fold in pecans and coconut. Turn into three 9 inch round cake pans, which have been greased, wax paper-lined, and greased again. Bake at 350 degrees about 35 minutes or until done. Frost with boiled or butter icing.

FROSTING:

3/4 c. coursely chopped white chocolate
1 c. sugar
2 1/2 tbsp. flour
1 c. milk
1 c. butter
1 1/2 tsp. vanilla

In sauce pan, combine 3/4 cup white chocolate and flour. Blend in milk, cook on medium heat, stirring constantly until mix is very thick. Cool. In large bowl cream butter, sugar, and vanilla. Beat until light and fluffy. (About 3 minutes). Gradually add completely cooled white chocolate mixture. Beat at high speed until it is consistency of whipped cream.