Heat oven to 300 degrees and butter custard cups. Mix first 5 ingredients in a saucepan reserving 1 cup sugar, bring to a simmer and remove from heat. Cool for 10 minutes. Remove and discard vanilla bean and lemon peel.
Whisk egg yolks in a large bowl and then whisk liquid mixture into yolks.
Bring 1 cup sugar and 1/2 cup water to boil over low heat in a small saucepan. Do not stir. Cover and boil until mixture turns light brown and thickens, about 15 minutes.
Pour equal portions of sugar syrup into prepared custard cups, chill for 15 minutes.
Pour equal amounts of custard mixture into each custard cup. Bake until a knife inserted in the center comesout clean, about 80 minutes.
Makes about 8 custard cups.