Preheat oven to 400°F.
Butter a 3 quart casserole dish.
In a large skillet, cook the mushrooms in 1 1/2 tablespoon of the butter over medium heat, stirring, about 5 minutes. Set aside.
In a large, dutch oven, melt 1/4 cup of butter. Stir in the flour, and cook the mixture over low heat, whisking constantly for three minutes. Remove from the heat.
Slowly whisk in the broth until smooth.
Then whisk in the milk and heat on a medium flame, whisking constantly, simmering for one minute. Then stir in the sherry and simmer for one more minute.
Remove from the heat. Flavor with lemon juice, nutmeg, salt and pepper to taste. Add the cooked spaghetti, ham, cheddar cheese and mushrooms to the sauce and toss.
Transfer the entire mixture to the buttered casserole.
In a separate pan melt 2 tablespoons butter and then mix in 1 cup panko bread crumbs until the butter is thoroughly absorbed. Sprinkle the mixture evenly over the tetrazzini. Dot the top with the a tablespoon of butter, cut into small pieces.
Bake uncovered on the middle rack of the oven until the sauce is bubbly and the top is golden, about 20 minutes. Serve and enjoy.