Combine egg yolks and milk in a heavy saucepan; beat well with a wire whisk. Sprinkle gelatin over milk mixture to soften; stir in 1/2 cup honey. Add to milk mixture, mixing well. Cook over low heat, stirring constantly, until creamy and slightly thickened. Remove from heat; stir in sherry. Transfer mixture to a large mixing bowl. Chill until consistency of unbeaten egg whites.
Fold whipped cream into gelatin mixture, and pour into a lightly oiled 5 1/2-cup ring mold. Chill overnight.
Unmold onto a serving platter. Toss peach slices with 1/4 cup honey and lemon juice. Arrange peach slices in center of mold; top each serving with peaches.