Cream butter; gradually add sugar and beat until fluffy. Blend in chocolate, beat in eggs, one at a time. Add vanilla and bourbon.
Sift dry ingredients together, and add alternately with milk in three addition, beginning and ending with flour. Fold in nuts.
Bake in 2 greased and floured 9-inch cake pans at 350 degrees for 35 minutes. Cool and frost with Kentucky bourbon fudge frosting.
Combine butter and chocolate, and melt over low heat. Stir to blend; cool slightly. IN a mixing bowl, beat the egg and add one cup of sugar. Gradually add chocolate mixture, beating constantly.
Stir in vanilla, lemon juice, and Kentucky bourbon. Gradually add remaining 2 cups of sugar. Continue beating, adding sugar as necessary until frosting is smooth and of spreading consistency. Stir in nuts.