Preheat oven to 350 degrees.
Combine flour, baking powder, salt, 2 T cocoa, and 2/3 cup sugar in a mixing bowl.
Add milk, vanilla, and melted butter.
Beat with an electric mixer until smooth and pale in color.
Stir in walnuts.
Pour batter into a buttered 8 inch square pan and set aside.
Combine remaining ingredients, except caramel, in a heavy saucepan over high heat, stirring constantly until mixture comes to a boil.
Gently pour hot sauce over cake batter.
Bake 40 minutes or until toothpick inserted in center comes out clean.
Serve drizzled with caramel topping.