Meanwhile, in 3-quart saucepan, heat water and salt to boiling. Slowly stir in grits. Reduce heat; cover and cook 5 to 7 minutes, stirring occasionally, until thickened. Remove from heat. Stir in 1 cup of the cheese and the butter until melted. Stir in sausage and egg product. Pour grits mixture into casserole; sprinkle with remaining 1/2 cup cheese.