Preheat the grill to high.
Brush the lamb chops lightly on both sides with 1 tablespoon oil and season with salt and pepper. Place on a platter and let marinate while you prepare the sauce.
Combine the chopped onion, the 1/4 cup oil, and the mustard in a small, heavy saucepan and bring to a boil, stirring. Reduce the heat to low and simmer gently until the onion is soft and lightly browned, about 10 minutes, stirring frequently.
Thin the mixture to a sauce consistency with 3 tablespoons water, adding more, if needed. Remove from the heat and taste for seasoning, adding salt and pepper to taste, add sugar if the sauce needs it.
Remove from the heat and cover to keep warm.
When ready to cook, oil the grill grate. Arrange the lamb on the hot grate and grill, turning with tongs, until cooked to taste, 6 to 8 minutes per side for medium.
Transfer the meat to serving plates or a platter and spoon the onion mustard sauce on top.
Serve with a french baguette