Cook spaghetti to desired doneness as directed on package. Drain; rinse with hot water. Cover to keep warm.
Heat oven to 350°F. Melt margarine in Dutch oven or large saucepan over medium heat. Add mushrooms; cook until tender, stirring occasionally. Stir in flour; cook 1 minute or until smooth and bubbly, stirring constantly. Gradually stir in chicken broth. Cook over medium heat until slightly thickened and bubbly, stirring constantly. Remove from heat.
Add half-and-half, sherry, 1 tablespoon parsley, salt, nutmeg and pepper; mix well. Add chicken and cooked spaghetti; toss to combine. Spoon into 13x9-inch (3-quart) baking dish; sprinkle with cheese.
Bake at 350°F. for 30 to 35 minutes or until thoroughly heated. Just before serving, sprinkle with chopped fresh parsley.