*Use caution when blending hot liquids. Hold blender lid down with a kitchen towel while blender is running.
To make lentils, combine all ingredients in medium saucepan and bring to boil. Reduce heat, cover and simmer 30-35 minutes or until lentils are very tender. Drain well. Remove and discard onion, garlic and bay leaf.
Meanwhile, heat oil in large nonstick skillet over medium-high heat. Add mushrooms and 1/4 tsp. salt. Cook, stirring occasionally, for 5 minutes or until lightly browned. Reduce heat to medium, add onion and cook, stirring often, for 5 minutes or until tender. Add garlic and cook, stirring constantly, for 1 minute or until fragrant. Add sherry and cook, stirring constantly, for about 1 minute or until liquid has evaporated. Transfer mixture to food processor.
Add lentils, walnuts, lemon juice, pepper and remaining 3/4 tsp. salt to food processor and process until very smooth. Add parsley and rosemary and pulse to combine.
Line 4-cup loaf pan or baking dish or small molds with plastic wrap, allowing 4 inches to hang over side. Spoon spread into pan and spread evenly. Fold plastic wrap over surface of spread, then cover pan with foil. Refrigerate 4 hours or overnight.
To serve, unwrap spread and invert onto serving platter. Remove plastic wrap. Garnish with chopped walnuts and rosemary sprigs, if you like. Serve with assorted whole grain crackers.