Preheat oven to 350°F. Grease medium sized casserole dish with non-stick spray. (I use my 8-inch square Pyrex.)
In a large saucepan over high heat, stir together the water, salt and garlic salt and bring to a boil. Slowly stir in the grits with a wooden spoon. Cover and reduce heat to low. Cook for 5 to 7 minutes, until thickened, stirring every so often.
Remove pan from heat. Uncover and stir in the cheddar, Parmesan cheese and butter until melted. Mix in the milk, eggs and cayenne until combined. Transfer mixture to the prepared baking dish. Bake for 45 minutes, or until set in the middle and golden.
Remove from the oven and let stand 10 minutes before serving.