In a large resealable plastic bag, combine coconut and, if desired, food coloring. Seal bag and shake to tint coconut; set aside.
In a large microwave-safe bowl, microwave marshmallows and butter until melted; stir until smooth. Stir in toasted coconut. With greased hands, shape mixture into small eggs, about 1-1/2 inches long. Add eggs a few at a time, to coconut; shake vigorously to coat. Place eggs on a waxed paper-lined sheet; let stand until set.
Shaved Coconut Nest: Pierce the eyes of a fresh coconut with hammer and clean nail. Invert coconut into a colander set in a bowl to drain liquid. Using the hammer, crack the coconut in half. With the end of a vegetable peeler, pry the coconut meat from the shell, keeping coconut in large pieces for longer strips. Using the peeler, cut coconut into very thin strips, cutting along the brown skin for color.
Arrange coconut in single layer on ungreased baking sheets. Let stand at room temperature 1 hour or until dry to the touch. Bake at 350° for 5-10 minutes or until lightly toasted, stirring occasionally. Arrange on cake to form a nest; fill with Coconut Bird Eggs.
Editor's Note: Look for unsweetened coconut in the baking or health food section of your grocery store.
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