Stir together soup and water; set aside. Combine remaining ingredients except peppers in a large bowl; add 1/3 cup soup mixture and mix well. Stuff peppers with about 2/3 cup meat mixture; replace tops on peppers. Shape remaining meat mixture into 2-inch meatballs. Arrange peppers in a lightly greased large soup pot; add meatballs around peppers. Spoon remaining soup mixture over peppers and meatballs. Bring to a boil over medium heat. Reduce heat and simmer, covered, for 35 to 45 minutes, basting occasionally with soup mixture in pot.
Tip: Herb-flavored stuffing mix makes a tasty topping for casseroles. Just place it in a plastic zipping bag and crush it quickly with a rolling pin…clever!
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