Brown sausage until it crumbles. Add 1/2 cup water and simmer 10 minutes. Drain and reserve half of the liquid. In a sauce pan, combine the reserved liquid with 1-1/2 cups water, salt and pepper. Bring to boil and add grits.
Cool 5 minutes. Add cheese and beaten egg with milk. Add sausage. Pour into an 8 x 11 inch pan sprayed with Pam. Bake until bubbly.
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Cajun Country -- New Iberia, Louisiana