Cook fettuccine according to package directions. Drain well.
Meanwhile, in a 12-inch skillet cook mushrooms and green onions in margarine or butter about 5 minutes or until vegetables are tender. Stir in flour, salt, pepper, and nutmeg. Add milk; cook and stir until thickened and bubbly. Cook and stir for 1 minute more. Add half of the Parmesan cheese and the sherry, if desired; heat until cheese is melted.
Add fettuccine, chicken, and ripe olives to skillet. Toss lightly to coat. Sprinkle with remaining Parmesan and, if desired, chives. Serve with lemon wedges, if desired. Makes 4 servings.