In a large saucepan, bring sugar, water, lemon juice and cinnamon sticks to a boil. Reduce heat; simmer, uncovered, 20 minutes. Let cool. Discard cinnamon sticks.
Preheat oven to 350°. In a large bowl, combine walnuts and extract. Stir in 2 cups syrup. Place one sheet of phyllo dough on a work surface; brush with butter. Layer with an additional phyllo sheet, brush with butter. (Keep remaining phyllo covered with plastic wrap and a damp towel to prevent it from drying out.)
Place about 2 tablespoons walnut mixture along one short side; fold sides of phyllo over filling. Roll up tightly, pressing edges to seal. Repeat with remaining phyllo dough, butter and walnut mixture. Place 2 in. apart on ungreased 15x10x1-in. baking pans; brush tops with butter. Bake 15-20 minutes or until golden brown.
For topping, in a small heavy saucepan, melt butter and chocolate over medium heat. Add confectioners' sugar and milk; cook and stir for 4-5 minutes or until thickened. Brush remaining syrup over warm pastries. Drizzle with chocolate sauce; sprinkle with walnuts.