In a medium bowl, marinate the water chestnuts in the sauce for at least 3 hours (or all day long), turning often. Drain and discard the marinade, and then roll the marinated water chestnuts in sugar.
Preheat the oven to 400°F.
Wrap each water chestnut in ½ strip of bacon (don't stretch the bacon). Secure the bacon with toothpicks and skewer through the water chestnut.
Place the wrapped water chestnuts on a baking sheet and bake for 15 to 20 minutes, or until the bacon is partially crisp. Serve hot.
Notes
These can be made ahead and refrigerated until time to bake and serve.
Try wrapping chicken livers instead of water chestnuts.