Slice pepper in half, place in small pan of water and simmer for 20 minutes. Drain well, finely chop peppers and set aside.
In large Dutch oven brown beef in oil over medium heat. Drain and add water, beer, and peppers. Bring to boil, reduce heat and simmer for 30 minutes.
Add garlic, salt, oregano, cumin, red pepper, chili powder, Tobasco, and bring to a boil. Reduce heat and simmer for 90 minutes.
Chili may be eaten now or add masa harina and keep on low heat (covered) for an additional 15 minutes.
Serve in hefty bowls. Garnish with sour cream and sharp cheddar cheese.
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