Chocolate Custard Devil's Food Cake

3 ounces unsweetened chocolate
1/2 cup milk
1 egg, beaten
2/3 cup sugar
1/2 cup shortening
1 cup sugar
2 egg yolks, beaten
2 cups cake flour
1/4 teaspoon salt
1 teaspoon baking soda
1 cup milk

CHOCOLATE FROSTING:
1/4 cup water
2 tablespoons butter
1/2 teaspoon vanilla
2 ounces unsweetened chocolate, melted
2 cups powdered sugar

Combine chocolate, 1/2 cup milk, whole egg and 2/3 cup sugar. Cook over low heat until thick. Cool. Cream shortening and remaining 1 cup sugar; add egg yolks and mix well. Add sifted dry ingredients alternately with 1 cup milk and vanilla. Stir in chocolate custard mixture. Bake in (2)8 inch layer cake pans at 350�F 25 to 30 minutes.

CREAMY CHOCOLATE FROSTING: Heat water and butter; add vanilla and chocolate. Add confectioners sugar; beat until spreading consistency.