Brown the sausage in a large skillet over medium heat, breaking it into small crumbles as it cooks, about 7-8 minutes until no longer pink. Drain excess fat.
In a large bowl, whisk together eggs, milk, salt, pepper, and dry mustard powder until well combined.
Grease a 9x13-inch baking dish with butter. Arrange the bread cubes evenly across the bottom of the dish.
Sprinkle the cooked sausage over the bread, distributing it evenly. Top with both cheeses, ensuring even coverage.
Pour the egg mixture carefully over the layered ingredients, making sure to moisten all the bread cubes. Gently press down with a spatula to ensure the bread absorbs the liquid.
Drizzle with melted butter and sprinkle with paprika for flavor and visual appeal.
Cover the dish tightly with plastic wrap and refrigerate for at least 8 hours or overnight.
When ready to bake, remove the casserole from the refrigerator and let it sit at room temperature for about 30 minutes while preheating the oven to 350°F (175°C).
Bake uncovered for 45-50 minutes until the top is golden brown and the center is set. A knife inserted in the center should come out clean when it's done.
Let rest for 10 minutes before serving. Garnish with additional fresh parsley if desired.