Wash the lemon and use a paring knife or lemon peeler to make strips of the skin of the lemon
Sprinkle the gelatin powder in 1/2 cup of milk. Allow to soften for about 15 minutes.
Combine rest of milk, half and half, cream, sugar and most of the lemon peel in a saucepan. Scrape the vanilla seeds from the vanilla bean, add to the saucepan and add bean as well. Bring to a simmer and whisk until sugar dissolves. Take from the heat and let it rest for about 10 minutes, allowing the flavors of the lemon and vanilla to seep into the milk/cream mixture.
Bring it back to a simmer and add the gelatin mixture, whisking until dissolved. Strain milk/cream mixture and divide over 8 small bowls or ramekins.
Chill in the refrigerator until set for about 8 hours or overnight.
When ready to serve, take panna cotta out of the bowls, you may need a small sharp knife to cut around the edges. Place each panna cotta upside down on a small plate and decorate with a few strips of lemon peel.