Cut bread into cubes. Arrange half of bread cubes in the bottom of well-greased 3 quart casserole. Sprinkle a layer of cheese over bread, top with remaining bread, then with cheese. Beat eggs with milk, salt and pepper. Pour egg mixture over bread and cheese. Cover and let soak overnight in refrigerator. Top with bacon, green pepper, onion and mushrooms.
Bake at 325 to 350 degrees for 45 minutes or until set. Let stand 5 minutes before cutting.