Mix together cake mix, pudding mix, water, eggs and oil; beat. Add coconut and walnuts. Pour into 3 greased, round cake pans. Bake 25 to 30 minutes at 350°. Cool and frost.
Melt 2 tablespoons oleo in skillet; add coconut and stir constantly over low heat until brown. Spread on paper towel to cool. Cream other 2 tablespoons oleo with cream cheese, milk and vanilla. Add powdered sugar and beat. Stir in 1 1/2 cups toasted coconut. Spread between layers and outside of cake. Sprinkle rest of coconut on top and around sides of cake.
Note: Serve a day after.
Mrs. Robert W. Detweiler