Chop mushrooms fine. Bring mushrooms & water to a biol, cover simmer 30 minutes. Add potatoes, cover simmer 20 minutes. With slotted spoon, transfer potatoes to food processor, also 1 cup of cooking liquid. Puree. Return to pot, stir thoroughly, set aside. In small skillet, saute bacon and onions 15 minutes. Return soup to low heat, add milk simmer 2 minutes. Add bacon mixture, and remaining seasonings, simmer 4 minutes. Server garnished with fresh dill.