Preheat oven to 350 degrees F. Brown meat in large skillet on medium-high heat. Meanwhile, mix 1-1/4 cups of the mozzarella cheese, the ricotta cheese, 1/4 cup of the Parmesan cheese, the parsley and egg until well blended; set aside. Drain meat; return to skillet. Stir in spaghetti sauce. Pour water into empty sauce jar; cover and shake well. Add to skillet; stir until well blended. (You should have about 5 cups sauce.)
Spread 1 cup of the meat sauce onto bottom of 13x9-inch baking dish; top with layers of 3 lasagna noodles, 1/3 of the ricotta cheese mixture and 1 cup of the meat sauce. Repeat layers two more times. Top with remaining 3 noodles and the remaining sauce. Sprinkle with remaining 1-1/4 cups mozzarella cheese and remaining 1/4 cup Parmesan cheese. Cover tightly with greased foil.
Bake 45 min. Remove foil; continue baking 15 min. or until center is heated through (160 degrees F). Let stand 15 min. before cutting for easier serving.