Mix yeast mixture:
In a large bowl, stir together warm water, warm milk, sugar, and yeast until combined. Add oil and stir for a few seconds.Rest batter:
Add flour and salt; stir until no lumps remain. Cover and let rise for 1 hour or until doubled in volume.Stir batter:
Remove cover and stir the batter with a fork for a few seconds.Heat frying oil:
In a medium pan over medium heat, heat enough oil for frying.Form and fry loukoumades:
Set a small bowl of oil near the batter. Dip a tablespoon into the oil, then shake off excess. Using oiled hands, take a small amount of batter and press a portion between thumb and index finger. Scoop with the oiled spoon and gently drop into hot oil. Repeat without overcrowding the pan.Brown and drain:
Press the loukoumades into the oil and turn them until deep golden brown on all sides. Transfer to a strainer.Coat with cinnamon and honey:
Sprinkle cinnamon over the loukoumades and turn them to coat evenly. Drizzle 1 tablespoon honey over them and turn again.Drizzle honey and pistachios:
Just before serving, drizzle additional honey and sprinkle with crushed pistachios.