Combine porcini mushrooms and 1/2 cup boiling water in a bowl. Cover and let stand 15 minutes or until tender. Drain in a colander over a bowl, reserving liquid.
Combine reserved liquid, 1 1/2 cups water, and broth in a medium saucepan (reserve 1 cup of broth mixture if making ahead). Bring remaining broth mixture to a simmer (do not boil). Keep warm over low heat.
Heat oil in a large saucepan over medium-high heat. Add garlic; sauté 1 minute. Add shiitake mushrooms, and sauté 2 minutes or until tender. Stir in porcini mushrooms, thyme, salt, and pepper. Add rice; cook 1 minute, stirring constantly.
Add broth mixture, 1/2 cup at a time, stirring constantly until each portion of the mixture is absorbed before adding the next (about 20 minutes total). Stir in sherry, and cook for 2 minutes or until the liquid is nearly absorbed, stirring constantly. Serve immediately.
Note: Risotto requires long stirring and constant attention. Chefs, however, use a make-ahead method: Reserve 1 cup broth mixture; prepare the risotto with remaining broth mixture. Remove risotto from heat; cool and spread in an even layer on a jelly roll pan, cover, and refrigerate up to 2 days. Just before serving, bring the reserved broth mixture to a simmer in a large saucepan; stir in the paritally cooked risotto. Cook until the liquid is nearly absorbed, stirring constantly. Add the sherry during the last 2 minutes, then serve.