Set a large, 12-inch saute pan over medium-low heat. Place the bacon in the pan, 6 strips at a time and cook until rendered and crisp, about 4 to 5 minutes per side. Repeat with the remaining bacon and set aside.

Pour off the fat from the pan and return to the heat. Add the water, milk and grits to the pan. Bring to a boil and reduce the heat to a simmer. Cook the grits, covered, stirring often, until soft and most of the liquid has been absorbed, 45 minutes to 1 1/2 hours depending on the grits. Add more water (a half cup at a time), if necessary.

Once the grits are cooked to the desired degree of tenderness, season with 1 teaspoon of the salt and 1/2 teaspoon of the pepper. Add the cheese and stir well to combine. Crack 5 eggs around the perimeter of the saute pan in a five point star pattern, and 1 egg in the center, and season with the remaining salt and pepper. Place 2 strips of bacon in an X pattern over each egg and return the lid to the grits. Continue to cook, undisturbed, until the whites of the eggs are set and the yolks are still runny, about 12 minutes. Remove the lid and serve the grits by scooping the eggs and bacon with the grits onto plates or shallow bowls. (For folks who like their eggs cooked more, simply stirring the eggs into the hot grits when served will cook the yolks further.)