In a small heavy saucepan boil water with sugar, without stirring, until a golden caramel. Remove pan from heat and carefully add red-wine vinegar and 1 tablespoon balsamic vinegar down side of pan (mixture will bubble and steam). Stir mixture over moderate heat until caramel is dissolved, about 3 minutes. Remove pan from heat. In a heavy saucepan cook morels in butter, stirring, over moderate heat until liquid from morels is evaporated, about 5 minutes. Transfer morels with a slotted spoon to a bowl and reserve. Add shallots to pan and cook, stirring, until golden. Stir in wine and boil until reduced to about 1 cup, about 15 minutes. Add stock and reserved morel soaking liquid (if using dried morels) and reduce to about 1 1/4 cups, about 15 minutes. Remove pan from heat and stir in caramel mixture. Sauce may be prepared up to this point 2 days ahead and chilled, covered. Chill morels separately, covered. Reheat sauce over moderate heat before proceeding with recipe. Add morels to sauce with salt and pepper to taste. If desired stir in additional balsamic vinegar, 1 teaspoon at a time, and lemon juice. To soak dried Morels: Dried morels should be rehydrated in twice their volume of warm water until tender, 10 to 30 minutes. Lift morels out of soaking liquid and strain liquid through a fine sieve into a bowl, reserving it if desired. Pat drained morels dry with paper towels. (Do not eat raw morels as they can cause digestive disorders.) Gourmet May 1995 Per serving: 838 Calories (kcal); 34g Total Fat; (56% calories from fat); 1g Protein; 58g Carbohydrate; 93mg Cholesterol; 309mg Sodium Food Exchanges: 0 Grain(Starch); 0 Lean Meat; 0 Vegetable; 0 Fruit; 7 Fat; 3 1/2 Other Carbohydrates Converted by MM_Buster v2.0n.