Stir together 1/2 C. chocolate chips and the sweetened condensed milk in small heavy saucepan. Cook over low heat just until chocolate is melted, stirring occasionally. Stir in one to two TBS. of the reserved cherry juice to make of spreading consistency.
Drain cherries, reserving juice.
Beat butter in large mixing bowl with electric mixer on medium to high speed for 30 seconds. Add sugar, cocoa powder, baking soda and baking powder; beat until combined. Beat in egg and 1 tsp of reserved jice. Beat in as much flour as you can with the mixer. Stir in remaining with wooden spoon.
Shape a scant 1 tsp. of the dough around each cherry. Place each ball in 1" foil or paper cup. Place 1" apart on cookie sheet.
Bake in 350 over for 10 to 12 minutes or until tops look dry. Transfer cookies to wire racks. Frost each warm cookie with 1/2 tsp of frosting - cool completely before serving.