Preheat oven to 350 degrees F. Grease and flour three 8-inch round pans.
In a mixing bowl, cream the sugar and butter, mix until light and fluffy. Add the eggs 1 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 pans. Bake for 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.