Preheat oven to 350 degrees F (175 degrees C). Line a 9x13 inch baking dish with aluminum foil.
In a large bowl, mix together ground beef, bread crumbs, Italian seasoning, garlic, 1/2 cup of the mozzarella cheese, 1/2 cup of the Parmesan cheese, egg, onion and mushrooms. Spoon mixture evenly into the seeded bell peppers. Replace tops. Place stuffed peppers in lined baking dish.
Bake in preheated oven for one hour, or until meat stuffing is cooked through. Remove from oven and discard pepper tops.
Sprinkle tops of peppers with remaining mozzarella and Parmesan cheeses. Return dish to oven until cheese is melted, about two minutes.
In a saucepan, heat spaghetti sauce on stove over medium heat, stirring regularly. When sauce begins to steam, remove from heat and pour over top of peppers.