In a large saucepan, add the drained rice and the coconut milk along with 1 cup water and salt to taste.
When the liquid begins to boil, cover the saucepan with a tight-fitting lid, lower heat to low, and let the rice cook 15 minutes.
In a small skillet, heat half the oil and add the chana dal, half of the urad dal, and the red chili peppers. Roast until golden and then powder in a spice grinder or with a mortar and pestle.
In the same small skillet, heat the remaining oil and add the mustard seeds. When they sputter, add the remaining urad dal, cashews and the curry leaves. Saute until the dal and cashews are lightly golden. Add the shredded coconut and continue to saute until the coconut starts to just turn a very light gold.
Add this and the powdered dals to the rice and mix gently with a fork, taking care not to mash the rice. Add salt if needed and serve.