Preheat oven to 400 degrees F. Lightly grease a 3-quart rectangular baking dish; set aside.
In a large saucepan bring broth and butter to boiling. Meanwhile, in a medium bowl stir together milk and polenta. Slowly add polenta mixture to boiling broth mixture, stirring constantly. Cook and stir until mixture returns to boiling; reduce heat to medium-low. Cook and stir for 3 to 5 minutes or until mixture is very thick. Remove from heat. Add 3/4 cup of the mozzarella cheese, the cream cheese, and 1/4 cup of the Parmesan cheese, stirring until cheeses are melted. Spread two-thirds of the polenta mixture in the prepared baking dish.
In a large skillet cook sausage, mushrooms, onion, and garlic over medium-high heat until meat is brown, using a wooden spoon to break up meat as it cooks. Drain off fat. Stir pasta sauce into meat mixture; heat through. Spread meat mixture evenly over polenta mixture in baking dish. Spoon the remaining polenta mixture onto meat mixture, spreading evenly. Sprinkle with the remaining 1/4 cup mozzarella cheese and the remaining 1/4 cup Parmesan cheese.
Bake, uncovered, about 20 minutes or until filling is heated through and top is light brown. If desired, sprinkle with basil.