Preparation:
Clean mushrooms, separating caps and stems. Slice half of the caps crosswise into 1/8" slices. Chop stems and remaining caps. Melt two tablespoons butter in an enameled or stainless steel skillet and saute the sliced caps until they just turn color, about five minutes. Remove from skillet. Add two tablespoons butter to skillet and saute chopped mushrooms and shallots until just tender, about 10 minutes. Combine chopped mushrooms and shallots with milk in a medium saucepan. Season with salt and pepper to taste. Simmer 20-25 minutes. Beat egg yolks until light and lemon colored. Whisk cream into eggs. Whisk 1/2 cup of hot soup mixture into egg-cream mixture, two tablespoons at a time. Then blend egg mixture into the rest of the soup, pouring in a slow, steady stream, and beating constantly. Add sherry and heat through, but do not allow to boil.