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1. Lightly grease a 3-quart rectangular or oval baking dish; set aside. In an extra-large skillet cook squash in hot oil over medium-high heat until light brown, stirring occasionally. Remove from heat. Place half of the bread pieces in the prepared baking dish. Top with half of the squash and half of each of the cheeses. Repeat layers.
2. In a large bowl combine eggs, milk, parsley, salt, and pepper. Pour evenly over layers in baking dish. Using the back of a large spoon, gently press down on layers. Cover with plastic wrap and chill for 2 to 24 hours.
3. Preheat oven to 325 degrees F. Remove plastic wrap. Bake for 45 to 50 minutes or until set and an instant-read thermometer inserted into the center registers 170 degrees F. Let stand for 10 minutes before serving. Sprinkle with additional parsley if desired.