Stir together sugar and cornstarch in a medium saucepan. Add milk and water. Cook over medium-high heat, until just boiling. Stir a small amount of warm mixture into egg yolk so the eggs won't cook when added. Add to saucepan. Boil gently for 1 minute, stirring constantly. Remove from heat.
Add chocolate chips and vanilla to hot mixture. Stir until chocolate is melted.
Transfer to a small metal bowl. Set the metal bowl in a ice bath and beat on high speed until cool. Fold in 3/4 cup whipped cream.
Spoon into eight dessert dishes. Cover with plastic wrap and refrigerate for up to two days.
To serve, top with whipped cream.