Preheat oven to 350℉
For the meatballs:Place the sandwich bread in a large bowl. Crack the egg over it and add the half and half. Let it sit for a few minutes, then stir with a fork until it makes a paste. Add in the ground beef, Italian sausage, 1 t salt and stir until well combined. You may need to use your hands for this.
Heat a large, oven proof skillet over med high heat.
Using a small ice cream scoop, shape the meat into balls and drop into the pan. Brown the meatballs on both sides, then move to the oven for 30 minutes.
For the sauce:Chop the onion and garlic. Place a large pot or Dutch oven over med high heat and coat the bottom with olive oil. When the oil is heated, sauté the onions and garlic until translucent. Add whole peeled tomatoes, tomato paste, dried basil, sugar, salt and pepper to the pot. Mix well and add the bay leaf. Cover and simmer on medium low heat for 25-30 minutes, until the tomatoes are softened.
Once the tomatoes are softened, remove the bay leaf and blend the sauce with a submersible blender until as smooth as you like. Add the can of diced tomatoes and check seasonings.
Add in the meatballs and stir gently. Hold on a simmer until ready to serve. Add in fresh basil right before serving.
Serve over a bed of hot spaghetti noodles, 2-3 meatballs per person.