In Dutch oven, cook sausage, beef, onion and garlic over medium heat until well browned. Stir in crushed tomatoes, tomato paste, tomato sauce and water. Season with sugar, basil, fennel seeds, Italian seasoning, 1 Tbs. salt, pepper and 2 Tbs. parsley.
Simmer (covered) for about 1 ½ hours (stirring occasionally).
Cook and drain lasagna noodles (rinse with cold water).
In a large mixing bowl, combine ricotta cheese with egg, remaining parsley and ½ tsp. salt.
To assemble, spread 1 ½ cups of meat sauce in the bottom of 9x13 pan. Arrange 6 noodles over meat sauce. Spread with ½ of the ricotta cheese mixture. Top with a third of mozzarella cheese slices. Spoon 1 ½ cups meat sauce over mozzarella and sprinkle with cup Parmesan cheese. Repeat layers and top with remaining mozzarella and Parmesan cheese. Cover with foil (sprayed with cooking spray).
Bake in preheated 375-degree oven for 25 minutes.
Remove foil and bake additional 25 minutes. Cool for 15 minutes before serving.