1Heat oven to 350°F. Spray 2 1/2- or 3-quart casserole with cooking spray.
2In 10-inch skillet, cook sausage over medium heat 7 to 9 minutes, stirring occasionally, until no longer pink; drain.
3Meanwhile, 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.
4Bake uncovered 25 to 30 minutes or until center is set. Sprinkle with parsley; cool 10 minutes. Serve with hot sauce.