In a large mixing bowl, cream butter and 1 1/4 cups sugar. Beat in vanilla. Combine flour, baking powder, and salt; add to creamed mixture alternately with milk.
In a small mixing bowl, beat egg whites on medium speed until soft peaks form. Gradually beat in remaining sugar, 1 T. at a time, on high until stiff peaks form and sugar is dissolved. Fold into batter. Fold in strawberries.
Pour into two greased and floured 9 inch round baking pans. Bake at 350 for 20-25 minutes or until a toothpick inserted near the center comes out clean. Cool for 10 minutes before removing from pans to wire racks to cool completely.
For frosting, in a large mixing bowl, combine confectioners' sugar and cocoa. Beat in butter and milk until smooth. Beat in vanilla.
Spread frosting over bottom cake layer; top with sliced strawberries. Top with remaining cake layer; frost top and sides of cake. Dip whole strawberries into frosting; arrange around and on top of cake. Refrigerate leftovers.