Combine first 5 ingredients in a large bowl; stir well. Combine 1 1/2 cups sugar, sour cream, vegetable oil, eggs, and 1 1/2 teaspoons vanilla; add to flour mixture, and stir with a wire whisk until blended. Stir in 2 1/2 cups carrot, walnuts, and raisins.
Pour batter into 2 greased and floured 9-inch square cakepans. Bake at 350° for 25 minutes or until a wooden pick inserted in center comes out clean. Cool in pans on wire racks 10 minutes; remove from pans; let cool completely on wire racks.
Beat cream cheese and butter at medium speed of an electric mixer until smooth. Gradually add powdered sugar, beating until well blended. Stir in remaining 1 teaspoon vanilla. Spread frosting between layers and on top and sides of cake. Combine coconut and 1/3 cup carrot; sprinkle on top of cake.