Beat eggs with water and nutmeg. Dip muffins in egg mixture. Heat butter in skillet. Place muffin halves in skillet, brown both sides, 2 to 3 minutes per side. Transfer muffins to serving platter, keep warm.
FOR THE STRAWBERRY SAUCE: In a small saucepan, combine sugar, cornstarch, orange peel and berries. Cook over medium heat until slightly thickened and clear. Serve warm over muffins that have been dusted with powdered sugar.