In a large skillet saute onion and green pepper in butter until tender. Add tomatoes, mushrooms and oregano. Add ground beef, simmer uncovered for 10 minutes.
Place half of the spaghetti in a greased 9x13 in dish. Top with half of the vegetable mixture. Sprinkle with 1 cup of the shredded cheese. Repeat layers. Mix the soup and water until smooth. Pour mixture over casserole. Sprinkle with parmesan cheese.
Bake uncovered at 350°F for 25-30 minutes or until thoroughly heated.