In a saucepan, combine sugar, cornstarch, mustard, salt, and celery seed. Stir in milk, vinegar and egg until smooth. Add butter. Bring to a boil. Cook and stir for 2 minutes or until thickened and bubbly. Cool. Stir in onion and mayonnaise. In a large bowl, combine potatoes and hard cooked onion and mayonnaise. In a large bowl, combine potatoes and hard cooke eggs. Add dressing and toss gently to coat. Cover and refrigerate at least 1 hour. If desired, serve in lettuce lined bowl and sprinkle with paprika.