Melt 1 tablespoon butter in a medium skillet. Saute mushrooms until soft, remove from skillet and place in a small, covered bowl.
Mix flour, garlic powder, salt and pepper in a shallow dish or bowl. Dredge chicken in flour mixture. Place bacon in same skillet and cook over low heat until cooked but not crisp. Add 2 tablespoons butter to skillet and saute coated chicken over medium heat for 2 minutes each side, adding remaining butter as needed to prevent burning.
Place chicken on a dish, cover and keep warm. In a medium bowl, slowly add water to cornstarch and mix together, then mix in wine. Pour liquid mixture into skillet, together with reserved mushrooms. Heat until mixture begins to boil and thickens, then pour over warm chicken and serve.