Pre-heat the oven to 400°F.
Place shredded oyster mushrooms on a sheet pan lined with parchment paper. Drizzle with 2 tablespoons of olive oil, and sprinkle with salt and pepper.
Roast the oyster mushrooms on the top rack of the oven, stirring occasionally, until the mushrooms just start to crisp, about 18-20 minutes. Remove and set aside.
Lower oven temperature to 325°F and carefully reposition rack to lower third of the oven.
While oyster mushrooms are cooking, heat ¼ cup of olive oil in a heavy, oven-proof pot over medium-high heat.
Add the shallots and ¼ teaspoon of salt, and lower temperature to medium-low. Saute, stirring occasionally, for 10-15 minutes, or until soft.
Add the portobello mushrooms, shiitake mushrooms, button mushrooms, thyme, sage, and garlic. Saute for 1 minute to release flavors, then add red wine, balsamic vinegar, water, ¼ teaspoon salt, ½ teaspoon pepper. Stir gently.
Increase heat to medium-high. When liquid begins to simmer, remove from heat. Add the oyster mushrooms and do not stir. Cover the pot and place in oven.
Bake for 30 minutes, checking at 20 minutes to see if more liquid is needed.