Place cereal, water, egg, oil, sugar, flavorings and vinegar in a mixer bowl. Mix lightly and let stand for 30 to 45 minutes. (This timing is very important.)
Stir flour, sugar, cocoa, dry milk, baking soda, cinnamon and salt together to blend well. Add to cereal mixture and mix at medium speed about 1 minute, or until well blended. Spread batter evenly in a 9" square cake pan that has been sprayed with pan spray or greased with margarine. Bake at 350°F for about 35 minutes, or until cake pulls away from the sides of the pan and a cake tester comes out clean from the center. Cool on a wire rack. Cut four by four.