Have all ingredients at room temperature. Preheat the oven to 400 degrees. Grease 8” cake pans with shortening and set aside.
Make the icing first. Place a large, heavy-bottomed pan over medium-low heat. Add the sugar, baking chocolate, evaporated milk, butter, and vanilla all at once. Cook until the sugar is completely dissolved, stirring frequently. Do not boil. It is important to make sure that the sugar is completely dissolved and no grainy texture remains.
Meanwhile, make the batter. Cream together the butter and sugar. Add the eggs all at once and beat until well incorporated. Add the flour and water alternately, beginning and ending with flour. (Note: the batter will appear to be curdled after each addition of water – this is normal.) Mix in the vanilla.
Pour approximately ¾ cup batter into each prepared pan. Smooth the batter to the edges. Bake for approximately 10 minutes or until layers are barely golden on top. Remove from oven and turn out onto cooling racks.
Clean the pans, grease them and repeat baking. When second set of layers goes into the oven, begin icing the cake. Place a still-warm layer on a cardboard round set atop a cooling rack inside a baking sheet. Spread ¼ cup icing on the layer spreading it gently to the edges. Top with the next layer and repeat.
When all layers have been stacked and iced, spread remaining icing over top and sides of the cake. If the icing becomes thick, return the pan to very low heat until it returns to spreading consistency.