Preheat oven to 350°F. Sauté beef and sausage in heavy large skillet over medium-high heat until cooked through, breaking up meats with back of spoon, about 4 minutes. Transfer meats to bowl. Combine spaghetti sauce, water and basil in large bowl. Spread 1-1/2 cups sauce mixture in bottom of 13x9x2-inch glass baking dish. Arrange 1/3 of noodles, slightly overlapping if necessary, atop sauce. Spread half of ricotta over noodles. Sprinkle with half of mozzarella cheese, half of meat mixture and 1/4 cup Parmesan cheese. Top with 1-1/2 cups sauce. Repeat layering with noodles, ricotta, mozzarella, meats and 1/4 cup Parmesan cheese. Arrange remaining noodles over. Spoon remaining sauce over, covering completely. Sprinkle with remaining 1/2 cup Parmesan. Cover tightly with heavy duty foil. Place on baking sheet.

Bake until noodles are tender and lasagna is heated through, about 1 hour. Uncover; let stand 15 minutes. (Can be prepared 1 day ahead. Refrigerate until cold; then cover with foil. Rewarm covered in 350°F oven about 45 minutes.) Cut lasagna into squares and serve.