In a small bowl, add warm water and yeast and let sit for 5 minutes until foamy. Add room temperature milk to the mixture and set aside.
Cream the butter, sugar and salt together with an electric mixer using the paddle attachment, until light and fluffy, about 5 minutes. Add the egg and mix to combine.
On low speed, alternately add 1 ¾ cups of flour and yeast mixture until combined. Turn the mixer to medium and beat until it forms a ball of dough, about 6-8 minutes. If it is too sticky to form a ball, add additional flour. The dough should pull away from the sides of the bowl.
Press the dough into the bottom of a deep dish 9 x 13 inch casserole dish. It should be at least 2 inches deep. (A regular pyrex dish may spill over a bit, but will still work, just place a baking sheet under it when baking to catch any drips.)
Cover with plastic wrap and place in a warm place to rise until double in size, about 1 hour.
Preheat oven to 350º.
Use a small bowl and combine the corn syrup, 2 tablespoons of water and vanilla. Stir until the corn syrup has dissolved. Set aside.
Use an electric mixer to cream together the butter, sugar and salt until light and fluffy, about 5 minutes. Add an egg and beat to combine. Alternately add flour and corn syrup mixture. Spoon it on top of the cake after it has risen. Use an offset spatula to spread it into an even layer.
Bake for 40-45 minutes until the center is just a little jiggly but the outside is firm. It should be golden brown and the top will be uneven. Allow to cool completely in the pan before cutting. Once cool, sprinkle with powdered sugar if desired.