In a small pot, steep dried mushrooms and bay leaves in water. Bring to boil then lower heat to keep water at quiet simmer.
Bring a large pot of water to a boil for pasta or egg noodles.
Meanwhile, heat EVOO, 2 turns of the pan, over medium-high heat. Add about 3 tablespoons of butter and melt into oil. Add mushrooms and cook to deep brown, about 10-12 minutes. Add salt, pepper, shallots, garlic and thyme, stir about 3 minutes more. Sprinkle flour over the pan then deglaze with sherry or Marsala.
Remove reconstituted mushrooms and bay from stock with a slotted spoon, discarding the bay leaves. Chop mushrooms and add to pan. Add stock, reserving the last few spoonfuls of liquid where grit may have settled.