In a bowl, combine 1/2 cup warm water, the yeast and 1 tablespoon plus 1 teaspoon granulated sugar. Let stand until foamy, 5 minutes.
In a food processor, finely grind the almonds and 1/4 cup granulated sugar; transfer to a standing mixer. Mix in the flour, 1/3 cup granulated sugar and 1 teaspoon salt.
In a saucepan, melt 1 stick butter; remove from the heat. Beat in the milk, eggs and orange peel. Beat in the yeast mixture at low speed. Switch to a dough hook and knead at low speed for 15 minutes. Transfer the dough to a large bowl, cover and let stand in a warm place until doubled in size, about 1 hour.
On a floured surface, roll out the dough 1 inch thick. Using a 1 1/2-inch cookie cutter, cut out rounds of dough and transfer to 2 greased baking sheets. Cover loosely and let stand for 30 minutes.
Meanwhile, in a small saucepan, combine the remaining 2/3 cup granulated sugar with 1/4 cup water. Bring to a boil and cook, undisturbed, until amber, about 5 minutes. Remove from the heat and stir in the cream. Stir in the almond extract and the remaining 3 tablespoons butter and 3/4 teaspoon salt.
Fill a 4-quart saucepan with enough oil to reach a depth of 3 inches. Heat the oil until it registers 350 degrees on a deep-fry thermometer. Working in batches, fry the dough, turning once, until golden, 2 minutes. Transfer to paper towels to cool slightly. Dust with confectioners sugar and serve with the sauce.