Step 1

Preheat oven to 350°F. Spread breadcrumbs on rimmed baking sheet. Bake until lightly toasted, about 10 minutes.

Step 2

Sauté bacon in large skillet over medium heat until crisp. Using slotted spoon, transfer bacon to paper towels. Transfer 2 tablespoons bacon drippings to heavy large pot; reserve for creamed corn. Discard remaining drippings.

Step 3

Place flour in medium bowl. Sprinkle with salt and pepper. Separate red onion slices into rings and toss in flour to coat lightly. Heat 1/2 cup oil in same large skillet over medium-high heat. Working in batches, add onion rings to skillet and cook until golden brown, adding more oil as needed, about 2 minutes per side. Transfer onion rings to paper towels. Mix breadcrumbs, bacon, onion rings, and half of green onions in clean medium bowl. Sprinkle topping with salt and pepper.

Step 4

Butter 13x9x2-inch glass baking dish. Add butter to pot with reserved bacon drippings; melt over medium-high heat. Add chopped onion; sauté until light golden and beginning to soften, about 6 minutes. Add frozen corn; sauté 5 minutes. Add milk and cream; bring to boil. Gradually stir in grits and cayenne pepper. Reduce heat and simmer until mixture thickens slightly, about 3 minutes. Remove from heat. Stir in cheese and remaining green onions. Season with salt and pepper. Transfer creamed corn to prepared dish. (Topping and corn can be made 1 day ahead. Cover separately and chill.)

Step 5

Preheat oven to 350°F. Bake gratin uncovered 25 minutes. Sprinkle topping over; bake until topping is slightly crisp and creamed corn thickens and is heated through, about 20 minutes longer.