In a mixing bowl, cream the sugar and butter, beat until light and fluffy. Add the eggs one at a time and mix well after each addition. Mix cocoa and food coloring together and then add to sugar mixture; mix well.
Sift together flour and salt.
Add flour mixture to the creamed mixture alternately with buttermilk. Blend in vanilla. In a small bowl, combine baking soda and vinegar and add to mixture.
Pour batter into 3 (8-inch) round greased and floured pans.
Bake for 20 to 25 minutes, or until a toothpick inserted into the center comes out clean. Remove from heat and cool completely before frosting.
Blend cream cheese and butter together in a mixing bowl. Add marshmallows and sugar and blend.
Fold in coconut and nuts. Spread between layers and on top and sides of cooled cake.