Prepare a grill for direct and indirect heat: For gas grills (with 3 or more burners), turn all the burners to medium-high heat; after about 15 minutes, turn off one of the side burners and turn the remaining burners down to medium. For charcoal grills, bank one chimney starter-full of lit and ashed-over charcoal briquettes to one side of the grill. Set up a drip pan on the other side to avoid flare-ups. (Be sure to consult the grill manufacturer's guide for best results.)
Heat a 10-inch cast-iron skillet on direct heat and add the bacon; cook, stirring often, until crispy, about 5 minutes. Remove the bacon with a slotted spoon to a paper-towel lined plate; set aside.
Add the potatoes and sprinkle with salt and pepper. Stir to coat with the bacon fat, then move to indirect heat and cover the grill. Cook, uncovering the grill and stirring every 5 minutes, until the potatoes are tender, about 20 minutes.
Sprinkle with the Cheddar and move back to direct heat. Cook, uncovered, until the potato bottoms are golden and the cheese is melted, about 10 minutes, depending on the heat of your grill. Let cool for 10 minutes, then dot with the sour cream and sprinkle with the scallions and reserved bacon.
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