Preheat oven to 350°F. Line muffin pan with baking cups.
In medium bowl, stir together flour, sugar, cocoa powder, salt, baking soda, and baking powder.
Measure out 2 tablespoons mashed beats; set aside. In large bowl, whisk together remaining mashed beets, sugar and oil until well blended. Add milk and eggs. Beat until well incorporated. Add chocolate, beat well. Add dry ingredients and whisk until well combined. Fill baking cups 2/3 full with cake batter.
Bake 18-20 minutes or until toothpick comes out clean. Cool cupcakes in pan on cooling grid 5 minutes. Remove from pan; cool completely on cooling grid.
For garnish, decrease oven temperature to 300°F. Line cookie sheet with parchment paper. Arrange sliced beets in single layer on prepared cookie sheet. Sprinkle evenly with 1 tablespoon + 2 teaspoons sugar. Bake 1-1/2 hours, sprinkling with remaining 1 teaspoon sugar during last 30 minutes. Remove from pan and cool completely on cooling grid.
For icing: In large bowl, beat cream cheese, reserved 2 tablespoons mashed beets, vanilla and salt with an electric mixer until creamy and well blended. Gradually add confectioners' sugar, mixing well after each addition.
Ice cupcakes with beet cream cheese icing and garnish with beet chips.