Combine 1/2 cup water, milk, and butter in a saucepan; heat, stirring constantly, until butter melts. Cool to 120° to 130°.
Combine 3 1/2 cups flour and next 5 ingredients in a bowl. Gradually add milk mixture to flour mixture, beating at high speed with an electric mixer until blended. Add 1 egg, and beat 2 minutes at medium speed. Gradually stir in enough of remaining flour to make a soft dough.
Turn dough onto a floured surface, and knead until smooth and elastic (about 10 minutes). Place in a well-greased bowl, turning to grease top. Cover and let rise in a warm place (85°), free from drafts, 1 hour or until doubled in bulk.
Punch dough down; turn out onto a lightly floured surface, and knead lightly 4 or 5 times. Divide dough in half. Divide each half into thirds. Roll 3 portions into 20-inch-long ropes, and place them side by side on a greased baking sheet; braid ropes, and shape into a ring. Pinch ends together to seal. Repeat procedure with remaining dough. Cover and let rise in a warm place (85°), free from drafts, 30 minutes. Lightly beat remaining egg, and brush over braids.
Bake at 350° for 20 to 25 minutes or until wreaths sound hollow when tapped. Cool on wire racks.
Stir together powdered sugar, 2 tablespoons boiling water, and lemon juice; drizzle over wreaths. Decorate with candied cherries and pecan halves.