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Mix all ingredients except oil and powdered sugar. Knead and let rise until doubled. Punch down. Roll into rectangle. Cut dough into into 2 inch wide strips at a diagonal. Cut again diagonally to form diamonds. Place on ungreased baking sheets, 2 inch apart. Cover loosely with plastic wrap. Gather up scraps and let rest 15 minutes. Roll and cut as before. Let rise until doubled in bulk, about 45 minutes. In a large saucepan, heat 3 inches of oil to 365 or until a 1 in cube of bread browns in 60 seconds. Carefully slide beignets into hot oil 3-4 at a time. Do not crowd. Fry until puffy and golden brown on both sides, turning once with tongs. Should be about 2-3 minutes per side. Remove with slotted spoon and drain on paper towels. Sift powdered sugar over hot beignets and serve hot.
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