Soak dried mushrooms in 1/2 cup hot water for 30 minutes. Meanwhile, trim fat from beef; cut meat into 1-1/2-inch cubes and set aside. In Dutch oven, sauté bacon over medium-high heat until crisp; transfer to paper towel-lined plate.
Drain fat from pan. Add 1 tbsp of the oil; brown beef, in 3 batches and adding remaining oil as necessary. Transfer to bowl. Drain fat from pan. Fry chopped onion, carrot, garlic, salt and pepper over medium heat until softened, about 3 minutes. Sprinkle with flour; cook, stirring, for 1 minute.
Reserving soaking liquid, remove mushrooms and chop; add to pan along with soaking liquid, wine and stock. Bring to boil, scraping up any brown bits. Tie parsley, thyme and bay leaves together with string. Add to pan along with bacon, beef and any juices. Cover and braise in 325°F oven until meat is fork-tender, 2-1/2 to 3 hours.
Meanwhile, in pot of boiling water, boil pearl onions for 3 minutes; drain and chill in cold water. Peel and trim, leaving root ends intact. In skillet, melt butter over medium heat; brown pearl onions, about 5 minutes. With slotted spoon, transfer to bowl. Add mushrooms to skillet; fry until browned, about 5 minutes.
With slotted spoon, remove beef to separate bowl. Add onions, mushrooms to liquid in Dutch oven; bring to boil over medium-high heat. Reduce heat and simmer, uncovered, until thickened and onions are tender, about 25 minutes. Discard herbs. Return beef to pan and heat through. Sprinkle with parsley.