Preheat oven to 375°. Over the sink place the kraut in a strainer give it a light rinse and a few squeezes to get out excess moisture. Heat a small skillet over medium high and add the butter, mushroom and onions. Saute these for about 5 minutes until they are softened. Reduce the heat to low, add the bullion cube, pepper, and 1/2 cup of water. Stir until the bullion cube is dissolved.
In a casserole dish add the drained kraut and contents of the skillet, mix to combine. Top with the links of fresh kielbasa nesting it in the kraut a little bit. Bake covered for at least one hour. Uncover and bake for another half hour to an hour. Until the kielbasa is brown and the edges of the kraut are a little crispy and browned. Serve with prepared horseradish or sauce and rye bread if desired.