In a large dutch oven, cook sausage, ground beef, onion, and garlic over medium heat until brown.
Add crushed tomatoes, tomato paste, tomato sauce and water. Stir together. Then add in basil, italian seasoning, salt, pepper, sugar and 2 tablespoons parsley. Stir to combine.
Simmer, uncovered, for at least 1 ½ hours stirring occasionally.
In a bowl, combine ricotta cheese, egg, remaining parsley and ½ teaspoon salt. Preheat oven to 375°.
Spread about 1 ½ cups sauce in the bottom of a 9 X13 baking dish. Arrange a single layer of noodles over the sauce. Spread with ½ of ricotta mixture. Top with ⅓ of mozzarella cheese. Spoon an even layer of sauce over the mozzarella and sprinkle with ¼ cup parmesan cheese.Repeat layers, and top with remaining cheese and fresh herbs (if you wish). Cover with foil and bake for 25 minutes.
Remove foil and bake an additional 25 minutes, or until sauce and cheese is bubbly.
Cool 15 minutes prior to serving.