In medium sized saucepan heat olive oil over medium high heat. Add in the chopped shallots and stir for about 3 minutes. Then add in the rest of the ingredients for the sauce: ketchup, molasses, honey, worcestershire sauce, dijon mustard, cayenne pepper, garlic powder, and liquid smoke.
Reduce the heat to low and let it simmer for about 30-40 minutes making sure to stir occasionally.
In a large bowl combine the beef, pork, pressed garlic, bread crumbs, Parmesan cheese, salt, pepper, and water. I find that using my hands is the easiest way to get it mixed well.
Once the meat is mixed well, begin shaping it into balls (about 2 inches in diameter).
Grill the meatballs on high heat until they are fully cooked.
Add the meat balls into a heavy bottomed pot and pour the sauce over them. Keep the pot over low heat for 30 minutes, making sure to stir occasionally. Serve them as an appetizer on a toothpick or in a sandwich. I used hoagie bread.
If you don't have a grill, these meatballs can easily be prepared on a greased skillet.