In a large bowl, combine the first eight ingredients. Crumble chicken over mixture and mix well. Shape into 1-1/2-in. balls.
Place meatballs on a rack in a shallow baking pan. Bake, uncovered, at 400° for 20-25 minutes or until no longer pink. Meanwhile, cut squash in half lengthwise; discard seeds. Place squash cut side down on a microwave-safe plate. Microwave, uncovered, on high for 15-18 minutes or until tender.
For sauce, in a large nonstick skillet, saute mushrooms in oil until tender. Stir in the remaining ingredients. Bring to a boil. Reduce heat; simmer, uncovered, for 8-10 minutes or until slightly thickened. Add meatballs and heat through.
When squash is cool enough to handle, use a fork to separate strands. Serve with meatballs and sauce. Freeze option: Place individual portions of cooled meatballs and squash in freezer containers. To use, partially thaw in refrigerator overnight. Microwave, covered, on high in a microwave-safe dish until heated through, gently stirring and adding a little water if necessary.