Pour the warm water into a small shallow bowl and sprinkle yeast and 2 teaspoons sugar into it. Allow the yeast and sugar to rest for 3 minutes and then mix thoroughly. Set bowl in a warm place for 10 minutes or until yeast bubbles up and mixture almost doubles in volume.
Combine 3 1/2 cups flour, remaining sugar, nutmeg, mace and salt and sift into a large mixing bowl. Stir in lemon zest. Separate center of mixture to form a hole and pour in yeast mixture and milk. Add egg yolks and using a wooden spoon slowly combine dry ingredients into the yeast mixture. When mixture is smooth, beat in 8 tablespoons of butter, 1 tablespoon at a time. Continue to beat 2 minutes or until dough can be formed into a soft ball. Place ball of dough on a lightly floured surface and knead like bread. During the kneading, add 1 cup more of flour sprinkled over dough. When dough is no longer sticky, knead 10 minutes more until shiny and elastic. Using a pastry brush, coat the inside of a large bowl with 1 tablespoon softened butter. Place dough ball in the bowl and rotate until entire surface is buttered. Cover the bowl with a kitchen towel and place in a draft-free space for 1 1/2 hours or until dough doubles in size.
Remove the dough from the bowl and place on lightly floured surface. Punch the dough down. Sprinkle cinnamon over the top. Pat and shape dough into a cylinder. Twist dough to form a curled cylinder and loop cylinder into buttered baking sheet. Pinch the ends together to complete the circle. Cover the dough with a towel and set in draft-free space for 45 minutes until dough doubles in size. Preheat oven to 375 degrees F.
Brush top and sides of the cake with egg wash and bake on middle rack of oven for 25 to 35 minutes until golden brown. Place cake on a wire rack to cool. If desired at this time hide the plastic baby in the cake.
Combine sugar, lemon juice and 3 tablespoons water until smooth. If icing is too thick add more water. Spread icing over cake. Immediately sprinkle colored sugars in rows consisting of 2 rows each of green, purple and yellow.
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