Cut butter into flour as for pastry. Stir in confectioners’ sugar, then 3 cups of the nuts. Add eggs, juice, and peel. Cover dough tightly with plastic wrap and chill thoroughly, for at least 2 hours. Grease baking sheets and preheat oven to 350 degrees F. Working with a small amount of dough at a time (keep the rest of the dough refrigerated), roll out to ¼ inch thick on a well-floured board, also dusting top of dough with flour to aid in rolling. Cut out with cookie cutters and transfer to baking sheets. (Dough may also be dropped by teaspoonfuls; cookies will flatten into brown-edged wafers as they bake.)
Brush cookies gently with egg-water mixture, and sprinkle with pinches of remaining ground nuts. Bake for 10 to 15 minutes, or until golden.