Why am I getting a "NullReferenceException" for a Instantiate line?

The most likely issue is that 'coconutprefab' has not be initialized. You don't show the code for initialization, so we cannot check that part of the code. If you are initializing it through drag and drop in the Inspector, and if you verify the value is set in the Inspector, check to make sure you don't have a second copy of the script attached elsewhere.

Yeah I used drag and drop, I made sure it was in there. Here is the full script:

 var dead = false;
 var player : GameObject;
 var shark : GameObject;
 var killcam : Camera;
 var thirdPCam : Camera;
 var FirstPCam : Camera;
 var OrcStun = false;
 
 var deadgui : GUIText;
 var mousescript : $$anonymous$$ouseLookFpp;
 var thirdPCamscript : ThirdPersonCamera;
 var charmotor : Character$$anonymous$$otor;
 var thirdcharmotor : ThirdPersonController;
 var fpsscript : FPSInputController;
 var CameraSwap : CameraSwap;
 var walkscript : Walk;
 var stuncooldown = false;
 var coconutcount : TotalCoconuts;
 var coconutprefab : GameObject;
 var cocoCharController : CharacterController;
 var spawnerwait = false;
 
 
 function Update () {
 
 
 if (player.transform.position.y <= 15) {
     dead = true;
     shark.transform.position.x = player.transform.position.x;
     shark.transform.position.z = player.transform.position.z;
     shark.transform.position.y = 6;
     player.active = false;
     mousescript.enabled = false;
     killcam.enabled = true;
     thirdPCam.enabled = false;
     FirstPCam.enabled = false;
     thirdPCamscript.enabled = false;
     charmotor.enabled = false;
     thirdcharmotor.enabled = false;
     fpsscript.enabled = false;
     CameraSwap.enabled = false;
     deadgui.enabled = true;
 }
 
 if (OrcStun == true) {
 sinstunned();
 
 }
 
 }
 
 
 function sinstunned() {
 stuncooldown = true;
 if (coconutcount.coconutsCollected > 0 && spawnerwait == false) {
 spawnerwait = true;
 coconutcount.coconutsCollected = coconutcount.coconutsCollected - 1;
 var coconut = Instantiate (coconutprefab, Vector3(player.transform.localPosition.x, player.transform.position.y + 2.5, player.transform.localPositionn.z - 2.0), Quaternion.Inverse(coconutprefab.transform.rotation));
 coconut.transform.rotation = Quaternion.Inverse(player.transform.rotation);
 coconut.GetComponent(CollectCoconut).player = cocoCharController;
 coconut.animation["ArmatureAction"].speed = -1;
 coconut.animation["ArmatureAction"].time = coconut.animation["ArmatureAction"].length;
 coconut.animation.Play("ArmatureAction");
 }
 walkscript.enabled = false;
 thirdcharmotor.enabled = false;
 player.animation.Play("OrcStun2");
 yield WaitForSeconds (2.0);
 walkscript.enabled = true;
 thirdcharmotor.enabled = true;
 OrcStun = false;
 
 yield WaitForSeconds (1.0);
 stuncooldown = false;
 spawnerwait = false;
 }