Generously grease bottoms and sides of 2 (8-inch) round cake pans with shortening. Line pans with waxed paper; grease paper and lightly flour.
In large bowl, beat cake mix, butter, coconut milk, ½ cup water, and eggs with electric mixer on low speed, about 30 seconds. Beat on medium speed for 2 minutes. Pour batter into pans.
Bake for 33 to 38 minutes or until a wooden pick comes out clean. Cool 10 minutes.
Remove cakes from pans to cooling racks; remove waxed paper. Cool completely, about 40 minutes.
In medium bowl, stir together 2 cups coconut, sugar, and sour cream.
Spoon 2 cups of the mixture into large bowl; stir in whipped topping, coconut extract, and 1 cup coconut. Set aside.
Cut each cake horizontally to make 2 layers.
Spread one-third (about ⅔ cup) coconut-sour cream mixture (without whipped topping) on cut side of 1 layer. Repeat layers twice. Top with remaining layer, cut side down
Frost top and side of cake with reserved coconut-whipped topping mixture. Press remaining coconut into top and side of cake. Cover, and refrigerate for 8 hours before serving.
Recipe by Southern Lady Magazine at https://southernladymagazine.com/bookclub/book-selections/the-moonshiners-daughter/coconut-cake-recipe/