Heat the oven to 375 degrees. Line 16 regular size muffin cups with paper liners or spray with cooking spray. In a large bowl, beat 1/3 cup butter and granulated sugar on medium speed until creamy. Add the eggs and 1/2 cup sour cream. Beat on low speed until mixed, and then beat on medium speed until smooth and creamy, scraping the sides of the bowl if necessary. Add the flour, baking powder and salt. Beat on low speed until moistened. Beat in 1/2 cup coconut milk and 1 teaspoon coconut extract on medium speed until smooth and creamy. Spoon the batter into the muffin cups, filling about 3/4 full. Bake for 18 to 23 minutes or until a toothpick inserted in center comes out clean. Cool the cupcakes in the pan for 5 minutes. Remove from the pans and cool completely on a cooling rack (about 20 minutes). Meanwhile, in a medium bowl, beat 2 tablespoons softened butter, 2 tablespoons sour cream, 2 cups powdered sugar, 1 tablespoon coconut milk, 1/4 teaspoon coconut extract with electric mixer on low speed until moistened. Beat on medium speed until smooth and creamy and spreading consistency, adding a little milk or coconut milk if necessary. Place the coconut in a small bowl. Frost the cupcakes and dip the tops in in the coconut to coat.