Melt 2 tablespoons butter in medium saucepan over medium heat.
Add scallion whites to melted butter and cook until softened, about 2 minutes.
Stir in water, half and half, hot sauce, salt and pepper and bring to boil.
Slowly whisk grits into saucepan until no lumps remain.
Reduce heat to low and cook, stirring frequently, until thick and creamy, about 15 minutes.
Remove grits from heat and stir in Monterey Jack, cheddar, 2 tablespoons butter. Stir to combine all ingredients. Season with salt and pepper to taste. Serve sprinkled with sliced dark parts of green onions.