Heat oven to 350°F (325°F for dark on nonstick pan). Grease and lightly flour 12-cup fluted tube cake pan, or spray with baking spray with flour.
In large bowl, beat cake mix, water, oil and eggs with electric mixer on low speed 30 seconds, then on medium speed 2 minutes, scraping bowl occasionally. Stir poppy seed into batter. Pour into pan.
Bake as directed on box. Cool in pan 10 minutes. Turn pan upside down onto cooling rack; remove pan. Cool completely, about 2 hours.
In small bowl, mix powdered sugar, 1 tablespoon lemon juice and the lemon peel. Stir in additional lemon juice, 1 teaspoon at a time, until smooth and consistency of thick syrup. Spread over top of cake, allowing some to drizzle down side. Garnish with additional grated lemon peel, if desired. Store loosely covered.