In a Dutch oven, cook sausage, ground 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 tablespoon salt, pepper, and 2 tablespoons parsley. Simmer, covered for about 1½ hours, stirring occasionally.
Bring a large pot of lightly salted water to a boil. Cook lasagna noodles in boiling water for 8-10 minutes. (Or use no-boil lasagna noodles). Drain noodles, and rinse with cold water. In a mixing bowl, combine ricotta cheese with egg, remaining parsley and ½ teaspoon salt.
Preheat oven to 375 degrees F (190 degrees C).
To assemble, spread 1½ cups of meat sauce in the bottom of a 9 x 13-inch baking dish. Arrange 6 noodles lengthwise over meat sauce. Spread with one half of ricotta cheese mixture. Top with a third of mozzarella cheese slices. Spoon 1½ cups meat sauce over mozzarella, and sprinkle ¼ cup Parmesan cheese. Cover with foil: to prevent sticking, either spray foil with cooking spray, or make sure the foil does not touch the cheese.
Bake in preheated oven for 25 minutes. Remove foil and baking an additional 25 minutes. Cool for 15 minutes before serving.