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1. Preheat oven to 350 degrees F. Lightly grease a 2-quart baking dish; set aside.
2. Bring a large saucepan of salted water to boiling. Prepare and set aside a large bowl of ice water. Cook green beans in boiling water about 2 minutes, just until bright green; drain and place in ice water to cool rapidly. Drain thoroughly.
3. Meanwhile, in very large skillet, melt 2 Tbsp. of the butter over medium heat. Cook and stir onion in hot butter about 3 minutes, until soft and translucent. Add 1 Tbsp. butter; turn heat to medium-high. Saute mushrooms about 4 minutes, until golden. Transfer onions, mushrooms, and beans to a large bowl.
4. For sauce, in the same skillet, melt remaining 3 Tbsp. butter over medium heat; stir in flour. Stir constantly, about 2 minutes, until flour turns light brown. Slowly pour in the milk; cook and stir about 4 minutes, until thickened. Stir in salt, pepper, and nutmeg. Remove from heat; cool completely. Pour cooked sauce over bean mixture; stir to coat evenly. Spoon into prepared baking dish. Bak about 40 minutes, until sauce bubbles around edges.
5. Meanwhile, for topping, pour 3 to 4 inches of oil into a deep heavy saucepan. Heat oil over medium-high heat until sizzling. Working in batches, separate shallots into rings; toss with cornstarch to coat, shaking off excess. Carefully add to hot oil. Fry for 2 minutes (each batch), until golden and crisp. Remove with slotted spoon; drain on paper towels.
6. Remove casserole from oven, sprinkle with shallots. Bake 5 minutes more, until top is crisp and golden. Serve warm.
