Reserve half of one candy bar for garnish. Break up remaining bars. In a small saucepan heat and stir broken candy and water over low heat until melted. Cool for 20 minutes.
Preheat ovent to 350 F. Grease and flour three 9x1 1/2-inch round baking pans; set aside. Combine flour, Clabber Girl Baking Powder, and baking soda; set aside.
In a large mixing bowl beat margarine with an electric mixer on medium speed for 30 seconds. Add 1 1/2 cups of the sugar; beat until fluffy. Beat in egg yolks. Beat in cooled, melted candy. Add flour mixture and buttermilk alternately to batter, beating well after each addition.
Wash and dry beaters thoroughly. In a medium bowl, beat egg whites until soft peaks form (tips curl). Gradually beat in remaing sugar; beat until stiff peaks form (tips stand straight). Fold egg whites into batter. Spread batter evenly in prepared pans.
Bake in 350 F oven about 30 minutes or until a toothpick inserted in the center comes out clean. Cool in pans on wire racks for 10 minutes; remove from pans. Completely cool on racks.
Before serving, spread jam between cake layers. In a bowl, beat whipping cream, powdered sugar, and vanilla until soft peaks form. Frost cake with whipped cream mixture. Shave reserved candy; sprinkle over top of cake. Store cake, covered, in the refrigerator.