Heat the water in a medium saucepan to boiling. Stir in the salt and whisk in the grits. Stir briskly to prevent clumping. Reduce the heat to low and simmer for 10 to 12 minutes, or until tender, stirring occasionally. Add the drained sausage (reserving about 1/4 cup for the topping), cheddar, and cream cheese and pepper into the grits. Stir well and pour into the greased baking dish. Sprinkle the remaining sausage on top and bake for 25 to 30 minutes.