Combine sugar, corn syrup, and 1 cup water in a small saucepan; bring to a boil, stirring constantly. Reduce heat, and simmer 3 minutes; let cool.
Place peaches and remaining 1 cup water in container of an electric blender or food processor; process until smooth, stopping once to scrape down sides.
Combine peach mixture, syrup mixture, lemon juice, and remaining ingredients.
Pour into a 13- x 9- x 2- inch pan, and freeze until almost firm. Spoon into a large mixing bowl; beat at medium speed with an electric mixer until slushy.
Return to pan, and freeze 8 hours. To serve, let stand at room temperature 10 minutes.
