Combine the first 5 ingredients, and then stir in the egg and water until smooth. Store in the refrigerator for 15 to 20 minutes.
Prepare the squash blossoms.
Carefully separate the flower petals without breaking them and remove the pistil in the center.
Combine the goat cheese, honey, basil, lime juice and chili powder until smooth. Carefully add about a tablespoon of this mixture to each blossom and twist the top of the flower tight.
Heat enough oil in a frying pan - about an inch deep - to accommodate the blossoms.
Dip the stuffed blossoms in the batter and set aside.
Add the blossoms to the frying pan and fry no more than a minute per side. Remove and allow to drain on a paper towel lined plate.
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