Preheat your oven to 450 degrees.
Using your dutch oven, sauté the bacon in the olive oil over medium-high heat for 3 to 4 minutes to brown lightly. Remove to a side dish with a slotted spoon. Reheat until fat is almost smoking before you sauté the beef.
Dry the stewing beef in paper towels; it will not brown if it is damp. Sauté it, a few pieces at a time, in the hot oil and bacon fat until nicely browned on all sides. Remove the beef and set it aside with the bacon.
In the same fat, brown the carrots, onions and 8 oz of the mushrooms, saving the rest for the end. Pour out the sautéing fat.
Return the beef and bacon to your dutch oven and season with the salt and pepper. Then, sprinkle on the flour and toss again to coat the beef lightly with the flour. Set dutch oven uncovered in middle position of your preheated oven for 4 minutes. Toss the meat and return to oven for 4 minutes more. (This browns the flour and covers the meat with a light crust.) Remove your dutch oven, and turn oven down the temperature to 325 degrees.
Stir in the wine, and enough beef stock so that the meat is barely covered. Add the tomato paste, garlic, thyme and the remaining mushrooms. Bring to a simmer on top of the stove. Then, cover and set in lower third of your oven for about 2 1/2 to 3 hours, or until the meat is done when a fork pierces it easily.
When the meat is tender, pour the contents into a sieve set over a saucepan. Wash out the dutch oven and return the beef and bacon to it.
Skim fat off the sauce. Simmer sauce for a minute or two, skimming off additional fat as it rises. You should have about 2 1/2 cups of sauce thick enough to coat a spoon lightly. If too thin, boil it down rapidly. If too thick, mix in a few tablespoons of beef stock. Taste carefully for seasoning. Pour the sauce over the meat and vegetables. Recipe may be completed in advance to this point.
For immediate serving: Cover your dutch oven and simmer for 2 to 3 minutes, basting the meat and vegetables with the sauce several times. Serve in the dutch oven, with crusty bread.
For later serving: When cold, cover and refrigerate. About 15 to 20 minutes before serving, bring to a simmer, cover, and simmer for 10 minutes, occasionally basting the meat and vegetables with the sauce.