In a large Dutch oven, cook bacon until crispy. Set aside and save drippings.
Now you are going to sear your beef. Turn the heat up to med-high and add some oil if you don't have enough bacon grease.Make sure the beef is dry. Wet meat won't brown! Work in small batches, searing the beef in the dutch oven until it is brown on all sides. Remove beef and set aside.
Turn the heat down to med and saute onion until soft. Add garlic and saute 1 minute.
Return beef to pan. Salt and pepper it to taste. Now add the flour and stir it around so everything is covered. Put the dutch oven in the preheated oven, uncovered, for 5 minutes. Stir, then cook for another 5 minutes. This is cooking the flour and giving it a bit of a crust. (and it's how Julia Child's does it so I won't argue!).
After the beef and flour has cooked, take the dutch oven out and turn oven down to 200. Add everything else to the pot (including the cooked, chopped bacon) except mushrooms. The liquid should be enough to just barely cover the meat, not drown it.
Bake covered @ 200 for the next 2 - 2.5 hours. You want the beef to simmer on low, so you may have to adjust the temperature. Add the mushrooms in the last half hour of cooking. Meat is done when fork tender.