Sift all the dry ingredients together. Stir in the walnuts.
Beat the eggs well and stir in the vegetable oil. Add the carrots, crushed pineapple, pineapple juice and water.
Add the semi-liquid ingredients to a well in the center of the dry ingredients. Stir only until moistened. Spoon into a greased 8 inch or 9 inch square baking pan and bake approximately 25 minutes, or until a knife inserted in the cake comes out clean. If a brownie style carrot cake is preferred, spoon the cake batter into 2 greased 8 inch square baking pans. Test for doneness after 20 minutes.
CREAM CHEESE ICING: In a food processor or blender with a sharp blade, process the cottage cheese until smooth. Add the cream cheese, diet margarine and Splenda Granular. Beat until smooth. Cut the carrot cake into squares and frost with the cream cheese icing. Place a walnut on each square. Otherwise, instead of the Cream Cheese Icing, dust with icing sugar for a decorative touch. Serves 9.