1. In a small bowl, soak the porcini in the hot water until softened, about 20 minutes. Drain the mushrooms, reserving the soaking liquid; squeeze the excess liquid from the mushrooms and finely chop them. Slowly pour the soaking liquid into a large cup, stopping when you reach the grit at the bottom.
2. Heat 1 teaspoon of the extra-virgin olive oil in a small skillet. Add the shallot and cook over moderate heat until softened, about 3 minutes. Add the finely chopped porcini and cook for 2 minutes. Add 3/4 teaspoon of the rosemary and 2 teaspoons of the reserved porcini liquid and cook until the liquid has evaporated. Transfer to a plate to cool.
3. In a large bowl, combine the milk with 1/4 cup of the reserved porcini liquid. Add the bread and let stand until the liquid is absorbed. Add the veal, egg, parsley, 1 1/4 teaspoons of salt, a scant 1/2 teaspoon of pepper and the mushroom mixture and knead gently until evenly combined.
4. With lightly moistened hands, roll the veal mixture into thirty-two 1 1/2-inch meatballs. Set them on a wax paper-lined tray and chill until firm, about 15 minutes.
5. Heat the pure olive oil in a large cast-iron skillet until shimmering. Dust the meatballs lightly with the flour, shaking off the excess. Add half of the meatballs to the skillet and cook over moderate heat until golden all over, about 8 minutes. Transfer the meatballs to a rack set in a baking dish and cook the remaining meatballs; discard the oil.
6. Combine the remaining 1/4 cup plus 1 tablespoon of extra-virgin olive oil and the onion in a large enameled cast-iron casserole. Cook over moderate heat until the onion is softened and just beginning to brown, about 6 minutes. Add the garlic, thyme and the remaining 1 teaspoon of rosemary and cook for 30 seconds. Add the tomato paste and cook, stirring, for 2 minutes. Add the chicken stock and the remaining porcini liquid and bring to a boil over high heat. Add the tomatoes and their juices, season with salt, pepper and the sugar and bring to a boil. Reduce the heat to moderately low and cook, stirring occasionally, until thickened, about 1 hour.
7. Add the meatballs to the sauce and simmer just until heated through, about 15 minutes. Meanwhile, cook the pasta in a large pot of boiling salted water until al dente. Drain the pasta well, transfer to a large serving bowl and toss with a little of the tomato sauce. Spoon the meatballs on top of the pasta, pour the remaining sauce over and serve.
ONE SERVING Calories 656 kcal, Total Fat 20.7 gm, Saturated Fat 4.7 gm
Make Ahead: The recipe can be prepared through Step 6 up to 3 days ahead; refrigerate the sauce and meatballs separately. Warm the meatballs in the sauce before serving.
Wine Recommendation: A California Merlot, such as the 1996 St. Supéry or the 1996 Geyser Peak, has just the right earthy richness to underscore the flavor of porcini as well as enough bite to tolerate the acidic tomato sauce.