In a small bowl mix together warm water, yeast, and 1 tsp sugar and set aside. In a large bowl, mix milk, 2/3 cup sugar, 2/3 cup melted butter, salt, and eggs, stir well and add to yeast mixture. Add half the flour and beat until smooth. Stir in enough of the remaining flour until dough is slightly stiff (dough will be sticky). Turn onto well floured board and knead 5-10 minutes. Place in well buttered bowl, cover and let rise in warm place, free from drafts, until double in size, about 1 to
1 ½ hours. When doubled, punch down dough and let rest 5 minutes.
Roll onto floured surface into a 15×20 rectangle. Spread dough with ½ cup melted butter. Mix together 1 ½ cups sugar and cinnamon, next sprinkle over buttered dough. Sprinkle with walnuts, and roll up jellyroll-fashion and pinch edge together to seal. Cut into 12 to 15 slices. Coat bottom of 9×13 and 8” square baking pans with ½ cup melted butter, next sprinkle with ¼ cup sugar. Place cinnamon roll slices close together in pans. Let rise in warm place until dough is doubled in size, about 45 minutes. Bake in preheated oven at 350 degrees for 25 to 30 minutes or until rolls are nicely browned. Cool rolls slightly.
Meanwhile, in medium bowl, mix melted butter, powdered sugar and vanilla. Add hot water 1 Tbsp at a time until glaze reaches desired spreading consistency. Spread over slightly cooled rolls and serve warm. Makes 12 to 15 large cinnamon rolls.