Step 1: In a large nonstick skillet, bring 2 cups water to a boil. Add potatoes, reduce heat to a simmer and cover. Cook for 5 minutes, until potatoes are tender. Drain and set aside.
Step 2: Wipe out skillet and heat on medium-high. Add panko and toast, stirring frequently, until beginning to lightly brown, 1 to 2 minutes. Transfer to a plate and set aside.
Step 3: In skillet, heat 1 teaspoon oil. Add sausage and cook, stirring, until browned 4 minutes. Transfer to a small bowl and set aside.
Step 4: In skillet, heat remaining 2 teaspoons oil. Add squash, onion and bell pepper and cook, stirring occasionally until beginning to brown, about 7 minutes. Add potatoes, sausage, thyme, 2 cups water and salt and cook until heated through, about 1 minute.
Step 5: Remove from heat and sprinkle with cheddar and panko. Cover and let stand for 10 minutes before serving.
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