• Preheat oven to 350 degrees F. Grease and flour three 9x2 inch round baking pans.
• In a large bowl, stir together the flour, baking powder and salt.
• In a mixing bowl, using an electric mixer, beat the butter and sugar until light and creamy. Beat in the extract. Combine the milk and the water, then add the milk mixture and flour alternately in three parts, stirring by hand until flour is well blended.
• With an electric mixer, beat the egg whites until stiff peaks just start to form, then fold them into the batter. It will be fairly thick.
• Divide batter among the pans and bake for 25-28 minutes or until cakes spring back when touched. Let cool in pans for 10 minutes, then carefully invert onto rack and let cool completely.

Frosting

• In a small saucepan, heat the cream and ¼ cup of whole milk until simmering, then add the chopped chocolate. You can also do this step in the microwave. Just heat the cream and milk together in a microwave-safe measure until mixture just starts to boil.
• Remove from heat and let stand for 2 minutes, then stir until chocolate melts. Set aside and let cool to room temperature. This might take 30 minutes or so. It's best to let it cool completely.
• With an electric mixer, beat the butter until light and creamy. Add 1 cup of the powdered sugar and beat until blended.
• Add remaining powdered sugar and cooled chocolate mixture alternately to the butter mixture, beating and scraping the sides of the bowl. Add the reserved ¼ cup of milk as needed.
• Beat in the vanilla. Taste test and add a pinch or two of salt as needed.
• This is a soft and smooth frosting that might seem runny at first, but should stiffen up a bit as you beat it. If for some reason it's runny, chill the bowl and then beat some more.