Preheat oven to 325 degree F. In a medium mixing bowl stir together the sugar, flour, snipped fresh thyme or dried thyme, lemon peel, and 1/8 teaspoon salt. In a small bowl stir together egg yolks, lemon juice, and butter. Stir in milk until combined. Stir milk mixture into flour mixture; set aside.
In another medium bowl beat the egg whites with an electric mixer on medium speed until soft peaks form; beat on high speed until stiff peaks form (tips stand straight). Fold egg whites into batter (batter will be thin).
Place four 6-ounce custard cups in a 9x9x2-inch baking pan. Divide batter evenly among the custard cups, filling almost full. Place pan on oven rack. Pour hot water into baking pan around cups to a depth of 1 inch. Bake for 35 to 40 minutes or until tops are lightly browned and puffed (tops may be cracked).
Carefully remove cups from pan to a wire rack. (Use canning jar tongs to easily remove custard cups from pan.) Serve warm or cover and chill up to 24 hours. Invert onto dessert plates, if desired. Top with whipped cream and garnish with sprigs of fresh thyme. Makes 4 servings.