Heat a large (6-quart), thick-bottomed Dutch oven on medium heat. Layer the bacon on the bottom of the pan and cook the slices gently, a few minutes on each side, until much of the fat has been rendered out, and the slices have browned lightly. Place the cooked bacon strips on a paper-towel-lined plate to absorb the excess fat. Chop the bacon and set aside.
Remove all but 2 tablespoons of bacon fat from the pan (do not pour the removed fat down the drain or it will clog the drain pipes). Increase the heat to medium high. Working in batches as to not crowd the pan, brown the lamb pieces on all sides, taking care not to stir the lamb pieces so they can get sufficiently browned.
Arrange the meat and vegetables in the pan in layers. Start first with a layer of lamb, then add a layer of potatoes, onions, turnips, carrots, and chopped bacon. Add another layer of lamb and then another of vegetables. Add the barley, thyme, black pepper and a teaspoon of salt. Add water or stock to the pot, and bring to a boil. Reduce the heat to a bare simmer. Let simmer, covered, but with the lid slightly ajar, for 1 1/2 to 2 hours, until the meat is fork tender and falling off the bones.
Skim any excess fat from the stew. Use tongs to pick out and remove bones. Adjust seasonings, adding salt and pepper to taste.