I've made coconut cake before by using the WASC recipe with coconut cake mix and coconut extract, and using rum in place of part of the water.
I like Texas Rose's suggestions. How much did you add? You don't need much to get a good flavor and texture. I add coconut all the time and don't have a problem. Maybe just sprinkle in a bit and make up for it with a coconut extract? Hopefully someone else can give you more info!
The outcome was a dense and heavy cake.
How much coconut did you add? If not a huge amount, then your mixing/measuring techniques might need tweaking.
Dense and heavy is usually a result of overmixing the batter.
Handy cake troubleshooting charts:
http://tinyurl.com/2p5bdu
http://tinyurl.com/32goqe
http://tinyurl.com/6c745g
http://tinyurl.com/6lpjww
Additionally, incorrectly measuring the flour can also contribute to a "heavy" cake.
How to measure flour correctly:
When measuring flour, do you use the "scoop and drag" method and then shake to level.... You should be aerating the flour prior to gently spooning it into the measuring cup and using a straight edge to level.
When I make any of the WASC cake recipes, I sift all the dry ingredients together into a large bowl, and mix all the wet ingredients in a second larger bowl.
Then I add the dry to the wet and beat for 2 mins. using an electric hand mixer at medium speed.
If using a stand mixer, I would mix at the lowest speed for 2 mins. or less.
When it comes to mixing, MORE (as in more speed or longer mixing time) is not BETTER. Overmixing will develop the gluten and result in a tough cake.
Everything you need to know to make, decorate and assemble tiered/stacked/layer cakes:
http://www.cakecentral.com/cake-decorating-ftopict-605188-.html
Above superthread has popular CC recipes for crusting American buttercreams, several types of fondant and doctored cake mix (WASC and other flavor variations) - and so much more!
HTH
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