Preheat oven to 350°. In a large skillet, cook bacon over medium heat until crisp, stirring occasionally. Remove with a slotted spoon; drain on paper towels., Meanwhile, in a Dutch oven, bring water, milk and salt to a boil. Slowly stir in grits. Reduce heat to low; cook, covered, until thickened, 15-20 minutes, stirring occasionally. Remove from heat. Stir in 1-1/2 cups cheese until melted. Slowly stir in eggs until blended. Stir in bacon, corn and pepper. Transfer to a greased 2-qt. baking dish. Sprinkle with remaining 1/2 cup cheese., Bake, uncovered, until edges are golden brown and cheese is melted, 35-40 minutes. Let stand 10 minutes before serving. If desired, serve with avocado. , Freeze option: Cool unbaked casserole; cover and freeze. To use, partially thaw in refrigerator overnight. Remove casserole from refrigerator 30 minutes before baking. Preheat oven to 350°. Bake grits as directed until heated through and a thermometer inserted in center reads 165°, increasing time to 45-55 minutes.