Preheat the oven to 350 degrees.

Bring a large pot of water to boil for the macaroni. Cook the macaroni until on the firmer side of al dente, about 7 minutes. I like to under do it because it will continue to soften in the casserole. Drain the pasta, then return it to the pot and set aside.

In the meantime, heat olive oil in a large skillet over medium heat. Add the onion, green pepper, and mushrooms to the skillet and saute until softened, about five minutes. Add the ground beef and cook until no pink remains. Drain the fat off the beef mixture, then season to taste with salt and pepper.

Add the tomato sauce, diced tomatoes, garlic, oregano, Italian herbs, and sugar to the beef mixture. Allow it to simmer for five or so minutes, stirring occasionally.

Carefully pour the beef mixture into the pot with the noodles and stir to combine. Add 1 cup of cheddar cheese and 1 cup of Italian blend to the mix. Pour the mixture into a 9 x 13 inch casserole dish. Top with the remaining 2 cups of cheese. Bake for 30 minutes, or until cheese is golden and melted. Top with parsley for serving.