In a large heavy saucepan, stir chocolate chips and butter until melted. In a small bowl, beat egg yolks until lemon-colored. Gradually stir in warm chocolate mixture; return all to the pan. Cook and stir over medium heat until mixture reaches 160°.
Remove from the heat. Stir in confectioners' sugar until blended. Place 1/2 cup in a small bowl; pour remaining chocolate mixture into a small bowl for filling. Cover each bowl with a paper towel. Let stand for up to 1 hour or until soft-set.
For truffles, roll the 1/2-cup portion into 12 balls. Roll in sprinkles or pecans. Cover and refrigerate until serving.
In a large bowl, cream butter and sugar until light and fluffy. Add eggs, one at a time, beating well after each addition. Beat in extract. Combine flour, cocoa, baking powder, baking soda and salt; gradually add to creamed mixture alternately with water.
Pour into three greased and floured 9-in. round baking pans. Bake at 350° for 25-30 minutes or until a toothpick inserted in the center comes out clean. Cool for 10 minutes; remove from pans to wire racks to cool completely.
For frosting, in a microwave-safe bowl, combine the butter, chocolate chips and 1/3 cup milk; microwave until melted. Whisk in extract until smooth. Gradually whisk in confectioners' sugar.
Transfer to a large bowl. Place in a large bowl of ice water. With a hand mixer, beat on medium speed until stiff peaks form, about 7 minutes; set aside.
For filling, gradually add enough of the remaining milk to reserved chocolate mixture, beating until it achieves spreading consistency.
Place one cake layer on a serving plate; spread with half of the filling. Repeat layers. Spread 2-2/3 cups frosting over top and sides of cake. Using a #195 star tip, pipe the remaining frosting into 12 rosettes on top of cake. Place a truffle on each rosette. Press chocolate sprinkles onto sides of cake. Store in the refrigerator.