Preheat oven to 350 degrees F and spray 9x13" baking dish with non stick spray.
Put your water or broth into a small saucepan with 1/2 tsp salt and bring to a boil. Slowly whisk in grits and reduce to low. Cover and simmer for 5 minutes stirring a few times throughout.
Brown ground sausage in a pan, drain when it is no longer pink and set aside. Beat eggs and milk in a bowl and set aside
In a large bowl combine cooked grits and sausage +1.5 c of cheese. Fold together and then add your egg/milk mixture and mix again. Melt butter and pour that in with a little pepper and remaining salt.
Pour into your 9x13 prepared pan and bake uncovered for about 1 hour or until a knife inserted in the center comes out clean.
Remove and set on a cooling rack for 5 minutes before slicing so it stays together.