1. Combine chicken, onion, 1 teaspoon of the salt, peppercorns and enough water to cover in a kettle. Heat to boiling; cover. Cook 40 minutes, or until chicken is tender. Remove from broth and cool until easy to handle. Strain broth into a 4-cup measure and set aside for making sauce.
2. Pull skin from chicken and take meat from bones; cube meat; place in a large bowl.
3. Saute mushrooms in 1/4 cup of the butter or margarine until soft in a large frying pan; combine with chicken.
4. Melt remaining butter or margarine in a saucepan. Measure out 1/4 cup and toss with bread crumbs in a bowl; set aside.
5. Stir flour, the remaining 1 1/2 teaspoons salt, pepper and nutmeg into remaining butter or margarine in saucepan; cook, stirring constantly, until bubbly. Stir in 3 1/2 cups of the chicken broth and cream. Continue cooking and stirring until sauce thickens and boils 1 minute; remove from heat. Stir in sherry.
6. While sauce cooks, cook spaghetti, following label directions; drain well. Spoon into two baking dishes, 13x9x2. Spoon chicken mixture over spaghetti; spoon sauce over all.
7. Add Parmesan cheese to bread-crumb mixture and toss lightly to mix. Sprinkle over mixture in baking dishes.
8. Bake in moderate oven (350°) 30 minutes, or until bubbly and crumb topping is toasted. Garnish with bouquets of watercress, sliced mushrooms and pimiento strips, if you wish.