In a heavy-bottomed skillet or deep fryer, heat the oil to 360ºF. Line a plate with paper towels and have a baking sheet handy.
In a shallow bowl, combine the hot sauce, garlic, ketchup and 2 teaspoons of water until blended. Mix together buttermilk and 1 to 1 1/2 cups water. Place the buttermilk mixture, flour and panko into three separate bowls and place them in this work order: buttermilk mixture, flour, sriracha mixture, panko.
Soak the onion rings in the buttermilk for at least 30 minutes. Dip the onion rings into the flour, then the sriracha mixture and finish them with the panko, setting them aside on the baking sheet as you finish. Let them set up for 10-20 minutes in the refrigerator before frying. (The batter sticks better that way).