MELT butter in large skillet on medium heat. Add onion; cook until soft. Add flour and mix with wire whisk. Gradually add evaporated milk. Cook over medium heat, stirring occasionally, until mixture comes just to a boil and is thick and creamy. Add ham, parsley, sherry, black pepper and nutmeg; mix well. Cook for 4 to 5 minutes on low heat. Taste; season with additional salt if desired.
POUR ham mixture into 8-inch-square baking pan. Cool in refrigerator for 30 to 45 minutes so that it will be easy to handle.
BEAT eggs with water in a small mixing bowl until frothy. Combine bread crumbs and flour and place in a second bowl or plate. Scoop out a heaping teaspoon of ham mixture from chilled pan, or divide mixture in pan by cutting it into thirds crosswise and in eights lengthwise. Shape into logs 1 1/2 inches long and 3/4-inch wide. Dip croquettes into eggs and roll in crumb mixture until evenly coated. Place croquettes on large jelly roll pan or baking sheet; cover with plastic wrap. Refrigerate for 30 minutes.
HEAT oil in a deep fryer to 350° F. Fry croquettes for 2 minutes or until golden brown. Drain on paper towels. Place on serving platter. Squeeze lime wedges over croquettes and serve with extra wedges. Serve hot.