In a heavy-bottomed saucepan, boil the water with sugar, without stirring, until it is a golden caramel color.
Remove the pan from the heat and slowly drizzle the red wine vinegar and the balsamic vinegar down the side of the pan. The mixture will bubble and steam when you do this.
Now stir the mixture over a medium heat for about three minutes, or until the caramel is dissolved.
Use a heavy saucepan to cook the morels in butter, stirring, over moderate heat until the liquid from the mushrooms has evaporated. This should take about five minutes.
Transfer the morels to a bowl and reserve.
Add the shallots to the saucepan and cook, stirring, until they turn a beautiful golden brown.
Add the red wine, stirring, and cook until it reduces to approximately one cup.
Add the stock and reduce again to about 1 1/4 cups.
Remove the pan from the heat and stir in the caramel mixture.
Add the morels with salt and pepper to taste. Taste for seasoning.
If desired, add additional balsamic vinegar, just one teaspoon at a time, and lemon juice.