Preheat oven to 350. Grease and flour 12-inch Bundt pan or tube pan.
Combine cake mix, pudding mix, milk, sour cream,and eggs in large mixing bowl. Beat on low speed just until blended. Beat on high speed for 2 minutes. Stir in morsels and nuts. Pour into prepared pan.
Bake for 55-65 minutes or until tooth pick comes out clean.
Cool in pan for 20 minutes. Invert onto wire rack and cool completely.
Melt baking chocolate and butter in a saucepan on low heat stirring until smooth.(If you want to do this in the microwave I would use shortening). Remove from heat. Stir in powdered sugar alternately with water until desired consistency. Stir in vanilla extract.