Preheat oven to 350 F. Lightly butter a 9x13 inch baking pan.
In a medium bowl, combine butter, flour, sugar, and macadamia nuts. Using pastry cutter or fork, cut butter into ingredients until thoroughly combined. Pour mixture into prepared pan, and press firmly into the bottom of the pan to form the crust. Bake in preheated oven for 20 minutes or until lightly golden brown. Remove from oven and place on a cooling rack to cool in the pan.
In a small bowl mix together remaining water and cornstarch. Whisk together until cornstarch is dissolved. In a large sauce pan, combine coconut milk, sugar, and 1 cup water. Heat over medium heat until heated through, but not boiling. Add vanilla, coconut extract, and cornstarch mixture. Whisk together and continue to cook over medium heat until mixture begins to thicken, about 5 to 8 minutes Remove from heat and pour over crust. Let cool for 15 minutes, then refrigerate.
Just before serving, top with whipped cream and sprinkle with macadamia nuts and coconut. Slice and serve. Serves 10 to 12.