In a saucepot, bring the water and butter to a simmer. Before the water comes to a boil start adding the grits, stirring steadily until incorporated. Add the salt and stir well. Reduce heat to low, cover and continue to simmer for 30 minutes, stirring occasionally. Add more water if needed.
While the grits are cooking, separate the eggs. Set the yolks aside in a dish, and refrigerate the whites. In a mixing bowl, combine the flour, sugar and baking powder and set aside.
When the grits are done*, remove them from the heat; transfer to a large mixing bowl and let cool to 110°F. This is best accomplished by stirring the grits, which will help them cool faster. Stir the egg yolks into the grits one at a time, mixing well after each addition.
Add the milk and mix well.
Add the flour mixture, mixing until just combined.
Beat the cold egg whites in a mixer or with a hand beater to medium peaks. Gently fold the whites into the batter and mix gently. Chill for at least 1 hour prior to cooking.**
When you’re ready to eat, pour the batter into a preheated and well-oiled Belgian-style waffle iron, and add a generous bit of chopped bacon and shredded cheddar. (I recommending using a generous 2 tablespoons each of cheddar and bacon per 1 cup of batter.***) Close the waffle iron and cook until golden brown. Remove the waffles from the iron and place on warm plates. Sprinkle more chopped bacon and shredded cheddar over the top of the waffles. Serve with good butter and real maple syrup.
Repeat until all the batter, chopped bacon and grated cheddar have been used.