Melt the butter and chocolate chips in a heavy saucepan over medium heat; mix until smooth and creamy; remove from heat and stir in the vanilla. Fold in the marshmallows and walnuts.
Scatter about half of the coconut onto a large baking tray. Form the chocolate mixture into two oblong logs and lay them onto the coconut. Use the remaining coconut to coat the logs. Refrigerate until the logs are firm, about 1 hour. Cut logs into 1.75cm slices.