In a wide dish, mix the granulated sugar and cinnamon and set aside.
In a medium saucepan, combine water, butter, brown sugar, and salt. Bring to a boil over medium heat, then add flour all at once, stirring vigorously with a wooden spoon. Cook and stir until mixture forms a ball and pulls away from the sides of the pan. Remove from heat. Cool for 10 minutes.
In a separate mixing bowl, mix together the eggs and vanilla extract. Add to the cooled flour mixture, beating well with a wooden spoon.
Fill a decorating bag fitted with a 1M large star tip with some of the churro dough. (The star tip helps create the ridges on the outside of the churro.)
Heat 2 inches of oil and the lemon peel in a deep saucepan to 350 degrees F. Make sure the oil is hot before squeezing any dough into it. Try testing the oil by dropping in a small amount of dough. If it bubbles quickly then it is probably ready. If you have a candy thermometer test the temperature. (When lemon peel becomes crispy remove from oil and discard.)
As soon as your oil is hot enough, squeeze about a 4-inch-long piece of dough into the hot oil for each churro. Cut off the dough with a pair of scissors or a sharp knife. Be careful not to burn yourself with the hot oil. Cook about 4 churros at a time. Allow the churros to fry for about 1 minute before turning over with a pair of tongs and frying for another minute. Churros should be a golden brown.
Drain the churros on paper towels. As soon as you are able to handle them roll each one in the sugar-cinnamon mixture. Serve warm with the Mexican chocolate dipping sauce.
Leftover churros can be reheated in the oven at 300 degrees F for 5 minutes.
Heat ¼ cup cream in a heavy saucepan over medium heat until it comes to a slow boil. Remove the pan from the heat and add Mexican chocolate. Let chocolate sit in the hot cream 3 to 5 minutes to soften, and then whisk chocolate together with the cream. Stir in butter, cocoa powder (optional), vanilla, cinnamon, and liqueur (optional).
If chocolate becomes too thick, stir in more cream, 1 tablespoon at a time, to desired consistency.
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