Bring first 3 ingredients to a boil in a Dutch oven, stirring to dissolve sugar. Stir in lavender buds. Add nectarines. Reduce heat, and simmer 8 minutes or until nectarines are just tender (do not overcook). Remove nectarines from pan with a slotted spoon, reserving liquid in pan.
Bring liquid to a boil, and cook until reduced to 3 cups (about 10 minutes). Cool slightly. Serve syrup with nectarines and yogurt. Garnish with fresh lavender, if desired.