Preheat oven at 350 degrees.
In a saucepan, combine 1 slightly beaten egg, 2/3 cups sugar, 1/2 cup milk and 3 squares unsweetened(1 oz. each). Cook and stir over low heat until mixture come to a boil. As soon as it bubbles, remove from heat. Stir constantly until then. Let cool.
Cream 1 cup sugar and 1/2 cup shortening until light. Add 1 teaspoon vanilla and 2 eggs - one at a time, beating well after each.
Sift together 2 cups cake flour, 1/2 tsp. baking soda and 1/2 tsp. salt.
Add to creamed mixture alternately with 1 cup of milk, beating after each addition. Blend in chocolate mixture.
Bake in 2 greased & floured round cake pans for 25 - 30 minutes (place in middle of oven). Check with toothpick to ensure complete baking.
Frost with Chocolate Satin Frosting.
Chocolate Satin Frosting
Combine chocolate, water and sugar. Blend with electric mixer. Beat in egg, then butter and vanilla.
Spread icing over first layer of cooled cake.
Refrigerate for 15 minutes
Then place second layer of cooled cake on first layer. Complete icing the entire cake. Replace back into refrigerator until set and firm.