For panna cotta:

1. In a medium saucepan set over medium heat, bring the cream, sugar, vanilla bean, vanilla bean scrapings and bay leaves to a gentle simmer. Remove from the heat, stir thoroughly and set mixture aside to steep.
2. Place the gelatin sheets in a small sauce pan or a bowl (that can be set over a pan of gently simmering water) and cover with water. Set aside for 10 minutes to soften gelatin. Drain gelatin and set the bowl over a pan of gently simmering water. Stir the gelatin with your fingers (if the pan is too hot for your fingers, it is too hot for the gelatin) until it is completely dissolved. Remove from the heat. Strain the cream mixture into a clean bowl. Slowly add a ladleful, about 1/2 cup of the now warm strained cream to the dissolved gelatin, stirring constantly. Add a second ladleful, continuing to stir constantly. Strain the gelatin-cream mixture back into the remainder of the bay flavored cream. Stir to mix completely.
3. Pour into eight 6-ounce custard cups or panna-cotta molds. Refrigerate, covered, until set. Keep chilled until serving time.

For glaze:

1. Place the water and sugar in a small sauce pan over medium-high heat and bring to a boil. Boil until the mixture thickens slightly, about 6 minutes. Cool. Add balsamic vinegar, a little at a time, to taste.

For walnuts:

1. Preheat the oven to 350°F. Place the walnut pieces in a small pan with water to cover by 1 inch. Bring to a boil over high heat. Strain the walnuts and drain well.
2. Spread the walnuts on a baking sheet in one layer. Toast in the oven, stirring frequently, until brown, crunchy and aromatic, about 10 minutes. Cool and set aside until serving time.

Serving the panna cotta:

1. One at a time, dip the panna cotta molds into hot water and run the tip of a small sharp knife around the sides. Invert the mold onto a serving plate with a gentle jiggling motion. Drizzle with the balsamic syrup glaze and scatter a few toasted walnuts around.