Saut? onions, peppers, and garlic in salad oil or melted shortening until tender. Add tomatoes, water, 1/2 cup salt, chili powder, thyme, and bay leaves to saut?ed vegetables. Simmer 1-1/2 hours or until thick and glossy. Set aside.
Wash scallops thoroughly; cut large ones in half. Drain well. Combine flour, 3 tbsp salt, pepper, and paprika Dredge scallops in seasoned flour; shake off excess.
Reconstitute milk and warm water; add eggs. Dip floured scallops in milk and egg mixture; drain. Dredge scallops in crumbs; shake off excess. Fry 3 minutes or until light brown. Drain well in basket or on absorbent paper. Divide fried scallops into 2 pans; pour 2 gallon of tomato sauce over scallops in each pan. Bake 30 minutes or until thoroughly heated.
2 lb 12 oz dry onions A.P. will yield 2 lb 8 oz dry chopped onions.