Preheat over to 350 degrees F
Grease 8-inch square baking dish
Bring water to a boil in medium sauce pan. Slowly stir in grits.
Cover and reduce heat to low. Cook, stirring occasionally for 5-6 minutes.
Add 1 1/2 cups cheese, evaporated milk, pepper and hot sauce to grits; stir well until cheese is melted. Add sausage and eggs; stir well. Pour into prepared baking dish.
Bake for 1 hour. Top with remaining cheese then bake for an additional 5 to 10 minutes or until cheese is melted and golden brown. Let cool for 10 minutes before serving.
NOTE: Batter can be made the day before; cover and refrigerate. Let stand at room temperature 30 minutes before baking.