Place bacon in a large, deep skillet. Cook over medium high heat until evenly brown. Drain, crumble, and set aside.
Put lamb, salt, pepper, and flour in large mixing bowl. Toss to coat meat evenly. Brown meat in frying pan with bacon fat.
Place meat into stock pot (leave 1/4 cup of fat in frying pan). Add the garlic and yellow onion and saute till onion begins to become golden. Deglaze frying pan with 1/2 cup water and add the garlic-onion mixture to the stock pot with bacon pieces, beef stock, and sugar. Cover and simmer for 1 1/2 hours.
Add carrots, onions, potatoes, thyme, bay leaves, and wine to pot. Reduce heat, and simmer covered for 20 minutes until vegetables are tender.