In a heavy medium saucepan, combine the sugar and water and bring to a boil over high heat. Reduce heat to medium-low, stir, and simmer until the sugar dissolves, about 5 minutes. Remove from the heat and cool slightly. In a large bowl, combine the syrup with the lime juice, tequila, orange liqueur and bitter orange liqueur, and whisk well.
Pour into a rectangular freezer-proof container and freeze just until ice crystals begin to uniformly form, about 2 hours.
Remove from the freezer and scrape the mixture with a fork to break up the crystals. Return to the freezer and freeze for 30 minutes. Remove again from the freezer and scrape, then return to the freezer. Continue the scraping/freezing process another 3 times, for a total of 4 hours. (If not serving after 4 hours, tightly cover with plastic wrap and freeze until ready to serve.)
To serve, place the sugar crystals on a plate. Dip the rims of 4 tall, stemmed glasses in water and then into the sugar to form a crust. Divide the Margarita Ice between the glasses. Garnish each rim with a lime slice, sprinkle with 1/2 teaspoon of lime zest, and serve immediately.