Spray 3 nine inch pans with baking spray. Line the bottoms with a parchment circle, then spray that a bit.
Preheat your oven to 350 degrees.
Whisk together the flour, baking powder and salt in a medium bowl.
In a small measuring cup, combine the coconut water and the Key lime juice and set that aside.
In a stand mixer, beat the butter and sugar for about three to four minutes. Add the vanilla and beat for just a few seconds. Add the flour mixture and alternate with the coconut water mixture.
In a clean bowl, beat the egg whites to soft peaks.
Fold the egg whites into the batter just until incorporated. Divide the batter into the three prepared pans. Bake at 350 degrees for 15 minutes. Test for doneness by inserting a toothpick in the center of the cake. If it comes out clean, the cake is done.
When done, cool the cakes in their pans for about 10 minutes. Turn them out and cool completely on a cooling rack.
Prepare the frosting by combining all of the ingredients, except the vanilla in a heat proof bowl. Beat with a hand mixer for about a minute. Place the bowl over a pot of boiling water without letting the bottom of the bowl touch the water. Resume beating with your mixer for 7 minutes. Remove the bowl from the heat and beat in the vanilla.
To assemble the cake, place one layer on a cake stand. I like to place three strips of parchment in a triangular shape under the outer edges of the cake for easy clean up. Then scoop about a 1/3 cup of frosting over the top and spread to the edges of the cake. Repeat with the next two layers. Frost the sides with the remaining frosting. Now, the fun part…get a handful of coconut and go around the sides of the cake, lightly pressing it into the frosting. You can cover just the sides, or the entire cake, like I did.
Be very careful about not letting the bottom of the bowl touch the boiling water when making the frosting. You'll end up with a crunchy and grainy texture if it does. I use a pot small enough to allow the bowl to sit on top.
Recipe by, Caroline Hurley, Taste Love and Nourish, www.tasteloveandnourish.com