In a medium saucepan, combine 1 cup butter or margarine, 1/4 cup cocoa, and water. Cook over medium heat until butter is melted.
In a large mixing bowl stir together sugar, flour, soda, and cinnamon. Add cocoa mixture to flour mixture, and blend. Beat together eggs and buttermilk, and blend into batter thoroughly. Stir in 1 teaspoon vanilla. Pour batter into ungreased 9 x 13 inch pan.
Bake for 20 minutes at 350 degrees F (175 degrees C).
To Make Frosting: Five minutes before cake is done, combine 1/2 cup butter, 1/4 cup cocoa, and milk in a saucepan. Bring to a boil, and simmer about 3 minutes; remove from heat. Stir in confectioners' sugar and 1 teaspoon vanilla, blending until smooth. Spread immediately over hot cake in pan. Sprinkle with nuts.