1. Adjust oven rack to medium-low position. Butter a bundt pan with softened butter; set aside.
2. In a large bowl, mix together milk, water, melted butter, sugar, and yeast.
3. Mix flour and salt together in a separate bowl, then slowly add to the wet ingredients. Stir until a crumbly dough forms. Turn out onto a lightly floured work surface and begin to knead, incorporating shaggy scraps back into dough. Knead until dough is smooth, about 5 - 10 minutes. Shape into ball.
4. Coat a large bowl with nonstick cooking spray or a tablespoon of neutral oil. Place dough in the bowl and coat the dough's surface with more cooking spray or oil. Cover the bowl with a damp towel and place in the warmest spot in your kitchen, then let rise until dough doubles in size, 50 to 60 minutes.
5. To make the lemon sugar coating, place sugar into a medium sized bowl, then grate the zest of one lemon into the sugar. Stir together to help the sugar absorb the fragrant oils in the zest.
6. Once the dough has risen, turn it out onto a floured surface and gently pat into a rectangle, about 1/4 - 1/2 an inch thick. Use a sharp knife to cut the dough into approximately 64 pieces.
7. Roll each piece of dough into a ball. Working one at a time, dip balls in melted butter, allowing excess butter to drip back into bowl. Toss in the lemon sugar mixture, then layer balls in the prepared bundt pan.
8. Cover bundt pan with a damp towel and leave in a warm place, until the buns have doubled in size, 50 to 70 minutes.
9. Heat oven to 350°F (175°C). Bake until top is deep golden brown, 30 to 45 minutes. Cool in pan for 5 minutes then turn out onto a platter and allow to cool slightly, about 10 minutes.
10. To make the glaze, beat cream cheese with icing sugar until smooth and light. Mix in the lemon juice until the glaze is smooth.
11. Drizzle the glaze over warm monkey bread, letting it run over top and sides of bread. Serve warm.