For sauce--melt the butter over medium heat in a medium saucepan. Which in flour, salt, pepper and dry mustard (if using). Gradually add hot milk, while whisking until well blended and there are no lumps. Cook, whisking constantly, for 1 minute. Remove from heat and set aside too cool slightly.
In a large bowl, mix chicken, onion, celery, bell pepper, salt and pepper.
Add the cooled white sauce and mix well.
Beat the egg with the 2 tbs water.
Form the chicken mixture into balls about the size of a ping pong ball. Dredge in the bread crumbs, then dip in the egg and dredge again with the bread crumbs. Place in the refrigerator while you heat the oil.
Heat about 2-inches/5 cm of oil in a dutch oven to 350F/180C. Add the croquettes to the hot oil and fry about 1-2 minutes each side or until golden brown. Drain on paper towels.