Saute onion in oil in large saucepan or Dutch oven for 5 minutes or until tender. Stir in flour, salt, thyme and pepper. Cook over low heat until mixture is smooth and bubbly; remove from heat.
Stir in evaporated milk gradually. cook over low heat until thickened and smooth, stirring constantly. Stir in spaghetti, sherry, salmon, olives and green pepper. Pour into 1 1/2 quart baking dish sprayed with nonstick cooking spray. Sprinkle with Parmesan cheese. Bake at 350F for 20 to 25 minutes or until bubbly.