Baked Cheese Grits

Preheat oven to 350 °F. Butter 8x8x2-inch glass baking dish. Bring 4 cups water, butter, and salt to boil in heavy medium saucepan. Gradually whisk in grits. Reduce heat to medium; cook until mixture thickens slightly, stirring often, about 8 minutes. Remove from heat. Add both cheeses; stir until melted. Season with pepper and more salt, if desired. Whisk milk and eggs in small bowl. Gradually whisk mixture into grits. Pour cheese grits into prepared dish. Bake until grits feel firm to touch in center (grits will still be soft), about 1 hour. Let stand 10 minutes and serve.