In a large pot over medium heat, brown the ground beef, sausage, onion, and garlic. Drain excess fat.
Stir in crushed tomatoes, tomato paste, tomato sauce, and water. Season with sugar, basil, fennel, Italian seasoning, 1 teaspoon salt, pepper, and 2 tablespoons parsley. Simmer, covered, for 1.5 hours, stirring occasionally.
Bring a large pot of lightly salted water to a boil. Cook lasagna noodles for 8 to 10 minutes. Drain and rinse with cold water.
In a medium bowl, combine ricotta cheese with the egg, remaining parsley, and 1/2 teaspoon salt.
Preheat oven to 375 degrees F (190 degrees C).
To assemble, spread 1.5 cups of meat sauce in the bottom of a 9x13-inch baking dish. Layer with 6 noodles, half of the ricotta mixture, and a third of the mozzarella cheese.
Spoon 1.5 cups meat sauce over mozzarella, and sprinkle with 1/4 cup Parmesan cheese. Repeat layers, ending with remaining mozzarella and Parmesan cheese.
Cover with foil and bake in preheated oven for 25 minutes. Remove foil and bake an additional 25 minutes.
Allow lasagna to rest for 15 minutes before serving for better structural integrity.