Finely dice the onion and mince the garlic. Chop the basil and the 1/4 cup parsley reserved for the meat sauce, keeping this parsley separate from the amount needed for the ricotta filling. Remove the sausage casings and divide the sausage meat into small pieces.
Place a large heavy-bottomed pot or Dutch oven over medium-high heat. Add the Italian sausage and ground beef, then cook for 8–10 minutes, breaking the meat into smaller pieces with a wooden spoon as it browns. Continue cooking until no pink remains and the sausage has released its fat.
Add the prepared onion and garlic to the browned meat. Stir continuously for approximately 2 minutes, until the garlic becomes aromatic and the onion begins to soften.
Stir the crushed tomatoes, tomato paste, and tomato sauce into the browned meat mixture. Work the tomato paste thoroughly into the sauce so no concentrated lumps remain.
Add the sugar, fennel seeds, Italian seasoning, 1/2 teaspoon salt, and 1/2 teaspoon black pepper. Mix thoroughly, reduce the heat to low, and cover the pot.
Allow the sauce to simmer gently for 1 1/2 hours. Stir from time to time to prevent the mixture from catching on the bottom and to promote even cooking.
If the sauce becomes excessively thick, incorporate the water gradually until the mixture is thick yet still easy to pour. Taste toward the end of the simmering period and adjust the salt or pepper as needed.
Approximately 30 minutes after the sauce begins simmering, place the ricotta, room-temperature egg, and 2 tablespoons finely chopped parsley in a medium bowl.
Gently combine the ingredients with a fork just until evenly mixed. Avoid excessive stirring so the ricotta retains a light texture. Season the mixture lightly with a pinch of salt and pepper, then leave it at room temperature until assembly.
Preheat the oven to 375°F (190°C). Keep the freshly shredded mozzarella and freshly grated Parmesan ready for layering.
Once the meat sauce has completed its simmer and the oven is fully heated, spread 1 1/2 cups of meat sauce evenly across the base of a 9 × 13-inch baking dish.
Arrange 4 oven-ready lasagna noodles over the sauce. Spread one-half of the ricotta filling evenly across the noodles, then scatter one-third of the mozzarella over the ricotta.
Spoon another 1 1/2 cups of meat sauce over the mozzarella and finish this layer with 1/4 cup Parmesan cheese.
Repeat the layering process with another 4 noodles, the remaining ricotta filling, another one-third of the mozzarella, 1 1/2 cups meat sauce, and 1/4 cup Parmesan.
Complete the lasagna with the final 4 noodles. Cover them with the remaining meat sauce, approximately 1 1/2 cups, followed by the remaining mozzarella and the final 1/4 cup Parmesan cheese.
Cover the baking dish securely with aluminum foil, sealing the edges well so the trapped steam can soften and cook the oven-ready noodles.
Bake the covered lasagna for 25 minutes.
Carefully remove the foil, taking care around the escaping steam. Return the dish to the oven and continue baking uncovered for another 25 minutes.
The lasagna is ready when the cheese is bubbling around the edges and the surface has developed a lightly browned, golden finish.
Remove the finished lasagna from the oven and allow it to stand undisturbed for 15 minutes before slicing. This resting period gives the layers time to firm sufficiently for cleaner portions.
Cut the lasagna with a sharp knife and serve while warm.