Place water, milk, grits and salt into a double boiler. Bring to a boil and reduce heat to a simmer. Cover and cook for 45 minutes to 1 hour. To avoid sticking and lumps, stir frequently with a heavy-duty wooden spoon or a whisk. When grits are tender, add 1¾ cups grated cheese and stir until blended smooth. Add 4 tablespoons butter, stir until completely melted, and then mix in the fresh-cracked pepper. Pour mixture into a casserole dish sprayed with nonstick spray. Sprinkle with remaining cheese and panko breadcrumbs and dot with remaining butter. Bake 30 minutes.