Grease twelve 2 1/2-inch muffin cups or line them with paper bake cups. Beat cream cheese, the 2 tablespoons sugar, and the egg yolk in a small mixing bowl with an electric mixer on medium speed till blended. Set aside.

Stir together flour, the 1/2 cup sugar, cocoa powder, baking powder, and salt in a medium mixing bowl. Make a well in the center of the dry ingredients; set aside.

Combine the whole egg, milk, and oil in another medium mixing bowl. Add egg mixture all at once to dry ingredients. Stir just till moistened (batter should be lumpy). Fold in walnuts. Spoon half of the batter into prepared muffin cups (about 1 tablespoon in each muffin cup). Spoon about 1 1/2 teaspoons cream cheese mixture on top of the batter in each cup.

Spoon remaining batter into muffin cups, filling each cup two-thirds full. Bake in a 400°F oven about 20 minutes or till tops are dry. Cool in muffin cups on a wire rack for 5 minutes.

Remove muffins from muffin cups. Sift powdered sugar over top of each muffin. Serve warm or cool. Cover and store any leftovers in the refrigerator up to 3 days.

Makes 12.