Mix the meatballs. In a mixing bowl, combine the meatballs ingredients and gently mix by hand, taking care not to overmix. Use a 1/4 cup scoop to portion the meatballs. Use wet hands to gentle roll into balls and transfer to a parchment lined baking sheet. Refrigerate until ready to use.
Preheat an oven to 325 F.
Brown the pancetta and pepperoni. Heat the oil in a large 6 qt dutch oven over medium low heat. Add the diced pepperoni and pancetta and cook, stirring occasionally, until browned and crispy. Use a slotted spoon to remove from the pot and transfer to a small bowl.
Saute the veggies. Increase the heat to medium high and add the diced onion, mushrooms, and green bell pepper. Cook for 3-4 minutes, until the veggies are starting to soften, then add the garlic. Cook an additional 2-3 minutes, until most of the water has cooked out of the veggies.
Build the sauce. Add the dried spices and then add the tomato paste and stir well to combine. Cook 3-4 minutes until the tomato paste darkens in color. Reduce the heat to medium and add the crushed tomato, tomato puree, and water and stir well. Bring to a simmer and add sugar and season with salt and pepper.
Add the meats. In a separate skillet, heat 1 tablespoon of olive oil over medium heat. Add the Italian sausages and brown the outside, it's okay if they aren't cooked all the way through. Transfer the sausages to the pot with the sauce and then gently arrange the meatballs in the pot. Stir gently to cover with sauce. Cover and transfer to the oven for 2 hours.
Finish. Remove the pot from the oven and taste the sauce for seasoning and season with salt and pepper as necessary. Serve over your favorite pasta with freshly grated parmesan and torn fresh basil.