In a microwave-safe bowl, combine the potatoes, squash and water. Cover and cook on high for 3-4 minutes or until crisp-tender. Place half of the mixture in a greased 2-qt. baking dish. Sprinkle with salt and pepper. Crumble sausage over potato mixture. Top with onion and remaining potato mixture.
In a small bowl, combine flour and 1/4 cup cream until smooth; stir in remaining cream. Pour over potato mixture. Cover and bake at 350 degrees for 30 minutes. Uncover; bake for 20-30 minutes longer or until potatoes are tender. Sprinkle with cheese; bake 5 minutes longer or until cheese is melted.