1. Place ¼ cups water in large saucepan. Pour sugar into center of pan, taking care not to let sugar crystals touch pan sides. Gently stir with spatula to moisten sugar thoroughly. Bring mixture to boil over medium heat, without stirring, until it begins to turn golden, 4 to 7 minutes. Gently swirling pan, continue to cook until sugar is color of peanut butter, 1 to 2 minutes.
2. Remove pan from heat and continue to swirl pan until sugar is reddish-amber and fragrant, 15 to 20 seconds. Immediately add remaining 2 tablespoons water (mixture will bubble) and swirl pan until water is incorporated. Pour caramel into 8 ½ by 4 ½ inch loaf pan: do not scrape out saucepan.
3. Whisk eggs and yolks together in medium bowl. Whisk in milk, condensed milk, and lemon zest until incorporated, then pour into prepared pan. Fill slow cooker with ½ inch water (about 2 cups) and set pan in slow cooker. Cover and cook until center of flan jiggles slightly when shaken and registers 180 degrees, 2 to 3 hours on low.
4. Transfer pan to wire rack and let cool to room temperature, about 2 hours. Cover with plastic wrap and refrigerate until well chilled, at least 8 hours or up to 4 days.
5. To serve, slide paring knife around edges of pan. Invert serving dish on top of pan, and turn pan and dish over. When flan is released, remove loaf pan. Use rubber spatula to scrape residual caramel onto flan. Slice and serve.