Place a 6 quart stock pot over medium heat. Add bacon and onions. Cook, stirring frequently until onion is softened and translucent, approximately 5 minutes. Sprinkle in flour; cook, stirring, about 2 minutes, do not allow flour to brown. Add tomatoes; stir to combine.
Gradually stir in milk; mixture will thicken. Add seasonings, salt, pepper, sage, nutmeg and bay leaf. Bring to a boil then add diced potatoes. Reduce heat, simmer, partially covered, stirring occasionally for 10 minutes.
Add corn; simmer, partially covered, until corn and potatoes are tender, approximately 10 minutes. Stir in lemon juice and cayenne. Season with additional salt and pepper to taste. Serve hot.