Heat the oven to 350 degrees. Grease and lightly flour 3 (8 or 9-inch) round cake pans.
In a large bowl, beat 1/2 cup butter, eggs and granulated sugar with electric mixer on medium speed until creamy. Add the flour, cocoa powder, baking soda, baking powder, salt, 1 cup sour cream, vegetable oil, milk, food coloring, and 2 teaspoons vanilla extract. Beat on low speed until moistened. Beat for 2 minutes on medium speed, scraping the sides of the bowl if necessary. Pour the batter evenly into the pans (about 2 cups each).
Bake for 25 to 35 minutes or until a toothpick inserted in the center comes out clean. Cool in the pans for 10 minutes. Remove cakes from the pans; cool on cooling racks for 30 minutes or until completely cooled.
In a medium bowl, beat the cream cheese and 1/4 cup butter with electric mixer on medium speed until creamy. Add 1/4 cup of sour cream. Beat on low speed until mixed. Add 1 teaspoon of vanilla and the powdered sugar. Beat on low speed until mixed. Beat on medium speed until the frosting is creamy and spreading consistency.
Place a cake layer on a cake plate, rounded side down. Spread with about 1 cup of the frosting. Place another cake layer over the frosting.
Spread with about 1 cup of the frosting. Place the remaining cake layer over the frosting, rounded side up. Spread the top and sides with the remaining frosting. Store covered in the refrigerator.