Bring a large pot of lightly salted water to a boil. Add the seashells, and cook until tender, about 8 minutes. Drain.
Place bacon in a large deep skillet over medium-high heat. Cook until evenly browned, stirring occasionally. Drain off most of the fat, and add the onion to the skillet. Cook and stir until transparent. Stir in the diced tomatoes, tomato sauce and water, and bring to a boil. Reduce heat to low, and simmer for about 10 minutes, or until the sauce has thickened to your liking. Serve sauce over pasta.