Heat the olive oil in a paella pan, or a large frying pan, over medium heat.
Add the onion and garlic and sauté for about 5 minutes or until tender.
Add the ham and mushrooms, and sauté for a further several minutes, until the mushroom have softened.
Pour in the rice, and combine well with the ingredients in the pan.
Add the stock, sherry, and saffron. Simmer, stirring occasionally, until the liquid has almost been absorbed and the mixture is creamy.
Stir in the Manchego cheese, butter, basil, and thyme.
Remove from the heat, and allow the paella to cool for 5 minutes.
Season with salt and pepper to taste, and serve.