Cut deep slits in fatty portion of roast; insert chopped bacon. Sprinkle roast with 2 tablespoons flour.
Brown all sides of roast in hot oil in an ovenproof Dutch oven. Add 1 teaspoon salt, 1/2 teaspoon pepper, and next 4 ingredients; bring to a boil over medium heat. Boil, stirring constantly, 3 minutes. Remove from heat, and cover.
Bake at 325° for 1 1/2 hours or until tender.
Remove roast from Dutch oven; keep warm. Measure drippings, and return to Dutch oven. Whisk together 1/4 cup water and 1 tablespoon flour per cup of drippings. Whisk flour mixture, remaining 3/4 teaspoon salt, and remaining 1/4 teaspoon pepper into drippings; cook over medium heat, stirring constantly, until thickened. Serve with roast.