Beat the egg whites to a stiff peak and set aside.
Combine the cracker crumbs with the baking powder.
In a separate bowl Cream the butter and the sugar together until creamy ; Beat in one egg yolk at a time until well blended together.
Beat milk and vanilla into the butter mixture ; add the crumb mixture and the nuts and fold in the stiffly beaten egg whites.
Spread the batter into a greased 8x8" sq. cake pan.
Bake @ 300° for 45 minutes or until tooth pick inserted in the center comes out clean.
Prepare the pineapple sauce by boiling the pineapple and sugar for 10 minutes , to thicken the sauce , mix in the water with the cornstarch and add it to the cooked pineapple sauce and continue to cook for 2-3 minutes.
Pour the pineapple sauce over top of the hot cake and garnish with whipped cream.