Mix together the flour and granulated sugar in a bowl. Set aside. In a separate bowl, mix together the eggs, buttermilk, baking soda and vanilla. Set aside.
In a medium size saucepan bring to a boil the water, butter and cocoa powder. Pour the hot mixture over the flour and sugar, blending lightly. Immediately stir in the egg mixture and than pour into the greased baking pan. Bake for 20 to 25 minutes.
While cake is baking, make the icing. Sift the powdered sugar into a bowl. Bring to a boil in a small saucepan the milk, butter and cocoa powder. Pour the hot mixture over the powdered sugar, adding the vanilla to it, and beat until mixture has a satiny sheen.
Remove the cake from the oven. The center of the cake should spring back when lightly touched. This is a sign that it is done. Spread the hot icing mixture over the cake. Allow to cool before slicing. Makes 32 cake slices.