In a large dutch oven or heavy-bottomed pot over medium-high heat, brown the ground round and hot Italian sausage. Drain excess fat, add the pepperoni and cook about 1 minute.
Add the onion, garlic, parsley, and fennel. Cook about 10 minutes, stirring frequently.
Add the crushed tomatoes, tomato paste, sugar, basil, bay leaves, oregano, salt, and pepper. Bring to a boil, add the wine.
Reduce the heat and simmer for 1 hour. Add the mushrooms and simmer another 30 minutes. (if doubling the recipe, simmer longer)
Preheat the oven to 350F degrees.
Boil the lasagna noodles according to the package instructions, drain and set aside.
In a medium-size bowl mix the ricotta, egg, and parmesan.
Spread 1 1/2 cups of the meat sauce evenly in the bottom of a 13x9x2 baking pan.
Layer 1/3 of the noodles over the sauce horizontally. Spread 2 cups of sauce over the noodles; 1/3 of the ricotta mixture and 1/3 of the mozzarella. Repeat with the second layer of noodles placing them vertically. Repeat a third time laying the noodles horizontally.
Bake for 1 -1 1/2 hours. Remove from the oven to a wire rack and let it sit for about 20-30 minutes before slicing.