In a medium cast-iron casserole or Dutch oven, heat the olive oil. Add the shallots and cook over moderate heat until softened, about 3 minutes. Add the orzo, rosemary, ham and mushrooms and cook for 1 minute, stirring. Add the water 1/2 cup at a time and stir constantly, allowing the liquid to be absorbed between additions, until the orzo is al dente, about 20 minutes. Stir in the cheese and lemon zest and season with salt and pepper. Serve with hot sauce.
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