In a large bowl, cream butter and sugar until light and fluffy, about 5 minutes. Add eggs, one at a time, beating well after each addition. Stir in peel and vanilla; mix well. Combine the flour, baking powder and salt; add to creamed mixture alternately with grapefruit juice. Beat just until combined. Stir in milk.
Pour batter into two greased and floured 9-in. round baking pans. Bake at 350° for 25-30 minutes or until a toothpick inserted near the center comes out clean. Cool for 10 minutes before removing to wire racks to cool completely.
For frosting, combine the sugar, egg whites, corn syrup and salt in a large heavy saucepan over low heat or double boiler over simmering water. With a portable mixer, beat on low speed for 1 minute. Continue beating on low over low heat until frosting reaches 160°, about 8-10 minutes.
Pour into the bowl of a heavy-duty stand bowl; gradually add the grapefruit juice, peel and vanilla. Beat on high until frosting forms stiff peaks, about 7 minutes. Spread between layers and frost entire cake. Yield: 12-16 servings.