Preheat oven to 350°.
Lightly spoon flour into a dry measuring cup; level with a knife. Combine flour, 2/3 cup granulated sugar, salt, and nutmeg in a large bowl; add buttermilk, rind, juice, margarine, and egg yolks, stirring with a whisk until smooth.
Beat egg whites at high speed of a mixer until foamy. Add 1/4 cup granulated sugar, 1 tablespoon at a time, beating until stiff peaks form. Gently stir one-fourth of egg white mixture into buttermilk mixture; gently fold in remaining egg white mixture. Fold in blackberries.
Pour batter into an 8-inch square baking pan coated with cooking spray. Place in a larger baking pan; add hot water to larger pan to depth of 1 inch. Bake at 350° for 35 minutes or until cake springs back when touched lightly in center. Sprinkle with powdered sugar. Serve warm.