Prepare the sauce. Heat olive oil in a large skillet over medium heat. Add onion and cook until softened, about 5 minutes. Stir in garlic and cook until fragrant. Add ground beef and sausage, breaking it up with a spoon, and cook until browned. Drain excess fat.
Stir in crushed tomatoes, tomato paste, tomato sauce, and water. Add sugar, basil, Italian seasoning, salt, pepper, and parsley. Simmer uncovered for 30 minutes, stirring occasionally.
Cook the noodles. While the sauce simmers, cook lasagna noodles according to package directions until al dente. Drain and lay them flat on parchment paper to prevent sticking.
Make the ricotta mixture. In a bowl, combine ricotta cheese, egg, 1/2 cup Parmesan, and a pinch of salt and pepper. Stir until smooth.
Assemble the lasagna. Spread 1 cup of meat sauce in the bottom of a 9x13-inch baking dish. Layer with 4 noodles, then spread 1/3 of the ricotta mixture over noodles. Sprinkle with 1 cup mozzarella and cover with 1 1/2 cups sauce. Repeat layers twice more. Finish with remaining sauce and top with mozzarella and Parmesan.
Bake. Cover with foil (to prevent sticking, spray foil with cooking spray first). Bake at 375°F for 25 minutes. Remove foil and bake an additional 25 minutes, until cheese is golden and bubbling.
Let rest for 15 minutes before slicing. Garnish with fresh parsley.