For the meatballs: Add the ground beef, sausage, oats, Parmesan, parsley, dried oregano, milk, egg and some salt and pepper to a bowl and mix together well with your hands. Roll into approximately 48 meatballs (1 inch) and place on a baking sheet.
To brown the meatballs, heat some olive oil in a heavy pot or large skillet over medium-high heat. Add the meatballs in 3 batches and cook, turning, until brown, 4 to 5 minutes per batch. Remove and drain on paper towels after each batch. Set the meatballs aside.
For the sauce: In a separate skillet or pot, heat some olive oil. Add the garlic and onion and cook until translucent, a few minutes. Add the diced tomatoes, tomato paste, hot water, parsley, sugar and some salt and pepper. Next, add the meatballs and stir to combine. Cook over medium heat for 20 minutes. Stir in the basil, then set aside to cool.
For the layering: Meanwhile, bring a large pot of water to a boil. Cook the pasta to al dente according to the package directions. Drain and set aside to cool.
To assemble: Spoon some cooled sauce on the bottom of a 9-by-13-inch dish. Layer on half of the pasta, half the sauce and meatballs and then half the mozzarella cubes. Repeat the layers once more and top the dish with the grated Parmesan.
If serving immediately, baked in a preheated oven at 350 degrees F until the cheese is golden and bubbly, 20 to 25 minutes. Let cool slightly and serve.
If serving later, cover the assembled dish and refrigerate. When ready to serve, bake straight from the fridge in a preheated oven at 350 degrees F until the cheese is golden and bubbly, 40 to 45 minutes. Let cool slightly and serve.