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Preheat the oven to 400 degrees F. Coat a 9-by-13-inch glass or ceramic baking dish with cooking spray.
Put the ham chunks in a food processor and pulse until finely ground but not pasty.
Transfer to a large bowl, then add the ground pork, grated onion, graham cracker crumbs, milk, egg and a generous grinding of black pepper. Mix with clean hands to combine.
Portion into 16 to 18 mounds (a 2-tablespoon ice cream scoop works well for this), then roll into meatballs. Arrange in the prepared baking dish.
Bake until lightly browned on top, about 20 minutes.
Meanwhile, combine the ketchup, brown sugar, vinegar, mustard and ½ cup water in a small saucepan and bring to a simmer over low heat.
Once the meatballs are lightly browned, pour the sauce over them and continue to bake, brushing the tops with the sauce once or twice, until the meatballs are cooked through and the sauce is bubbling and slightly thickened, 18 to 22 more minutes.
Let cool a few minutes before serving.