They are both good English, but they have slightly different meaning. in the first sentence, 'only' applies to 'chocolate cake', in the second, it modifies 'I make'.
1. 'I make only chocolate cake' - I can make all sorts of cake, but I choose to make chocolate cake and no others.
2. 'I only make chocolate cake' - I can make chocolate cake, but I cannot make any other kind of cake.
You would never say 'except for I make chocolate cake only'.