I did something similar, but much more informally and without the permanganate. As far as the sugar-water concentration, I saturated around 125ml of water with sugar. I then added a few drops of 98% "concentrated" sulfuric acid. This worked just fine for me, but it will still produce steam, SO2, and I'm pretty sure with the heat that some of the sulfuric acid evaporated off also.
I would recommend either a fume hood or a well ventilated area. Test in small amounts first in a fume hood (or outside) so you know exactly what to expect. It really doesn't take much sulfuric acid to get this reaction going, especially if the sugar is dissolved. I also did this with just some dry sugar.
[Edit] I decided to put concentrated in quotes because it's somewhat of a relative term.