Preheat the oven to 350 degrees. Grease and flour two 9 inch round cake pans.
Sift together the flour, cocoa powder, salt, baking soda and baking powder in a bowl. Set aside.
In another large bowl, cream together the butter and sugar until light and fluffy. Add the eggs, one at a time to the sugar and butter until completely mixed.
In a bowl mix the coffee and the milk together then set aside.
With your mixer on low, add half the flour to the butter mixture. Pour in the coffee/milk and mix for a minute or so. Then add the last of the flour mixture and beat until thoroughly mixed--about 2 minutes or so.Pour into your prepared pans and bake on the center rack 20-25 minutes until a toothpick comes out clean.
Make the frosting:
In a bowl over a pan of simmering water (make sure the water doesn't touch the bowl) melt the chocolate. Add the water and butter and stir until smooth. Remove from the heat. Add the chocolate mixture to the bowl of your stand mixer or large bowl. Then whip or use a hand mixer to beat in the powdered sugar just until blended and no lumps remain. Allow to cool and it's ready for your cake.