Combine sugar and water in a small saucepan over medium-low heat; cook until sugar is dissolved. Cool to room temperature.

Purée melon chunks until smooth in a food processor or blender. Stir in Tabasco sauce, lime juice, lime peel and sugar mixture.

Pour mixture into a shallow pan. Freeze 4 to 5 hours, stirring occasionally, until mixture is frozen, granular and slightly slushy.