In a saucepan place beans and enough water to cover the beans, bring to a boil. Boil for 5 minutes and then drain off the beans. Put back the beans and put 2 cups of water. Bring to a boil, reduce the heat to medium-low. Cook until the beans are tender, about 45 minutes. The beans are ready when you can easily smash them with your fingers. Remove any water that is left.
Let the beans cool slightly, then blend it till smooth. Return it back on the stove on low, add sugar and keep mixing until it bubbles. Remove the mixture and place it in a bowl to cool completely.
When the red bean paste is ready to handle, roll them into 1 inch balls and set aside.
Make mochi dough. In a large microwavable bowl, put all of the ingredients and whisk until a smooth batter. Cover with plastic wrap leaving a hole for the steam. Microwave for 2 minutes. Remove bowl, mix batter for about 1 minute with a rubber/wooden spatula (something sturdy, because the batter will thicken up a lot.) Put another plastic wrap over the bowl, again leaving a hole and microwave for another 4 minutes. Remove the bowl and transfer dough to another clean bowl, this will help the dough to cool a bit faster. At this point you should have a dough that is extremely thick and sticky, similar to putty texture.
Get a 7" x 7" plastic wrap sheet and spray the top with oil, making sure the entire surface is oiled. Place about 1 1/2 TBSP of the dough onto the middle of the plastic wrap, fold over one side and flatten with your palm until 1/4" thick. Place one red bean ball in the center of the dough, now holding the mochi in your hands with the plastic, start to close the dough around the red bean paste to cover it and form it into a ball. Without touching the sticky mochi with your hands, put it into a plate of desiccated coconut, and cover completely. Put them into paper muffin cups and serve.
Try to work quickly when the dough is warm, as soon as it gets cool the form will set. If the dough is too warm the ball will start to fall flat. If you see that the balls have fallen too flat, just use your hands to form them back to a ball.
I use Coconut Dream's coconut milk, it can be found at any natural food stores. Its a lot lighter than coconut milk found in the cans.