How to use panels for embeded nodes?
Try using user568458's solution, but instead of displaying fields in the view, display a "fully rendered node" and set the view mode to a custom view mode.

To customize a view mode, and then configure the layout of a custom view mode, use Display Suite module.

See this about view modes.

If you activate Display Suite's sub module Panel View modes, you can then use the Panels module interface, instead of Display Suite for layouts.

EDIT
I just went to do this myself and discovered that this feature has disappeared in the latest version of Display Suite!

Bummer :(

However, you can still utilize Display Suite to a lesser degree... Sorry