1. PREHEAT the oven to 350°F. Cream together the butter and sugar until light and fluffy, in a standing mixer with the paddle attachment.
2. WHISK together the egg whites and shredded coconut in a separate bowl. Add in the coconut extract and then the egg whites and shredded coconut mixture in 3 batches into the butter-sugar mixture.
3a. MIX the flour, baking powder and salt together in a bowl and add into the creamed butter-sugar mixture, while alternating with the coconut milk but beginning and ending with the dry ingredients. Be sure to stop and scrape the sides of the bowl often.
3b. If you want to tint the layers, divide the batter into thirds and tint two of the three with a different pastel color.
4. DISTRIBUTE the cake batter evenly into 3 cake pans. Bake the cake in the oven for 30 minutes or until golden brown and firm in the center. Cool the cake pans on a rack for 10 to 15 minutes.
5. WHIP the butter and cream cheese in a standing mixer with the paddle attachment until light and fluffy. Mix in the coconut extract and powdered sugar until completely blended.
6. TOSS together in a slider storage bag 1-1/2 cups of the shredded coconut and 4 to 6 drops of green food coloring, until the coconut becomes green. Frost the cooled coconut cake in layers with a small amount of frosting. After each layer has been frosted, sprinkle on ½ cup of shredded coconut and press into the frosting before adding on the next layer of cake.
7. FROST the entire outside and top of the cake and use the remaining shredded white coconut to coat the outside of the cake.
8. FINISH the top of the layered coconut cake by sprinkling on the green coconut shreds, but take care to not get any of the shreds around the outside. Garnish the top of the cake with assorted Easter egg candy and chocolate.