Preheat oven to 375°F (190°C). Cook lasagna noodles according to package instructions until al dente. Drain and lay flat on parchment paper to prevent sticking.

Make the meat sauce: Heat olive oil in a large pot over medium heat. Add onion and garlic, sauté until translucent. Add ground beef and sausage, breaking it up as it browns.

Stir in crushed tomatoes, tomato paste, water, basil, oregano, salt, and pepper. Simmer uncovered for 20 minutes, stirring occasionally.

Prepare cheese mixture: In a bowl, combine ricotta, egg, parsley, and 1/4 cup Parmesan. Mix until well blended.

Assemble lasagna: Spread 1 cup meat sauce in bottom of 9x13 baking dish. Layer 3 noodles, 1/3 ricotta mixture, 1 cup mozzarella, and 1 cup meat sauce. Repeat layers twice.

Top with remaining mozzarella and Parmesan. Cover with foil (sprayed with oil to prevent sticking) and bake 25 minutes. Remove foil and bake 20 more minutes until bubbly.

Let rest 15 minutes before slicing. Garnish with fresh basil if desired.