Mix the crumbled yeast with the sugar and roughly half of the lukewarm milk. Let rest for 10 minutes.
Put the flour, melted butter, salt, and eggs in a mixing bowl. Add the yeast mixture and the remaining lukewarm milk. Knead with a hand mixer dough hook into a soft dough.
Dust with flour, cover, and let rise in a warm place for 1 hour or until the dough has doubled in volume.
Roughly chop the walnuts and cut the bacon into fine strips.
Knead the dough vigorously with floured hands. Work in the walnuts and bacon. Place the dough in a 25 cm bundt pan greased and dusted with flour. Let rise for 20 minutes.
Preheat the oven to 175°C (347°F) or 150°C convection (302°F) or gas level 2. Bake for about 50 minutes. Remove the Guglhupf from the pan and allow to cool.