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In a shallow baking dish, whisk together egg, milk, and 2 Tbsp water. In another baking dish, whisk together both types of flour, dry milk, powdered sugar, baking soda, dry mustard, and remaining 1/2 tsp paprika, and salt and pepper. Meanwhile heat about two inches of peanut oil to 325 degrees in a cast iron skillet. Working in batches, dip chicken in the egg mixture, turning to coat, then dredge in flour mixture and shake off any excess. Fry the chicken about 4 min. until brown.
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