Place lamb in resealable plastic bag set in dish. For marinade, in bowl whisk together 2 teaspoons of the peel, the lime juice, honey, 2 teaspoons of the tarragon (or 1 teaspoon dried), the garlic, salt, and pepper. Reserve 1/4 cup marinade. Pour remaining over lamb. Seal bag; turn to coat. Refrigerate 1/2 to 2 hours; turning once. Remove lamb; discard marinade.
On twelve 6-inch skewers thread lamb and melon, leaving 1/4-inch space between. For charcoal grill, place on rack directly over medium coals. Grill, uncovered, 12 to 14 minutes or until meat is slightly pink in center, turning and brushing often with reserved marinade.
Stir remaining peel and tarragon into yogurt. Serve skewers with yogurt, flatbreads, and arugula. Makes 6 servings.