In a large mixing bowl, soak bread in enough milk to cover it.
Meanwhile, in a small saucepan, cook onion in butter until onion is tender, but not brown.
Press milk from bread, discarding milk. In large bowl, combine bread, eggs, beef, pork, parsley, salt, Worcestershire sauce, peel, juice, paprika, nutmeg, and onion mixture. Mix lightly with your hands. Form into meatballs.
In large skillet, bring broth to boiling. Add meatballs. Return to boiling; reduce heat. Simmer, covered, for 15 minutes or until meatballs are done (160 degree F). With a slotted spoon, transfer meatballs to a serving bowl and keep warm. Skim fat from cooking liquid. Reserve 2-1/2 cups cooking liquid, adding water, if necessary.
Mix cold water and flour. Stir into reserved cooking liquid. Cook and stir until bubbly. Cook 1 minute. Pour over meatballs. Serve with hot noodles, rice or spaetzle. Top with additional snipped parsley. Makes 6 to 8 servings.
Reduce fat by using the leanest meat your butcher sells. Substitute 1/2 cup refrigerated egg product for the eggs.