In a large, heavy skillet, lightly brown ground beef, sausage, onion and garlic in the oil. Be sure to keep the meat chunky, not finely separated, while cooking. Drain the meat. Add pepperoni, tomatoes, tomato paste, water, salt, pepper and oregano. Simmer, uncovered, for 30 minutes.
Cook and drain lasagna noodles according to package directions.
In a 13 x 9-inch pan, spread 1 cup of the prepared sauce. Alternate layers of noodles, sauce, ricotta, mozzarella and parmesan cheeses, ending with sauce, mozzarella and parmesan.
Bake for 40 minutes or until lightly browned and bubbling.