Put green beans in a large saucepan, cover with water. Bring to a boil and boil for 3 minutes. Remove from heat and drain in colander and rinse with cold water.
Melt butter in frying pan. Add chopped onion and saute until onion is translucent. Remove from heat and stir in bacon pieces. Set aside.
Put 1 cup water and 1 cup milk in saucepan. Stir in country gravy mix. Bring to a boil, stirring constantly. Once it has thickened, remove from heat and stir in smoked cheddar cheese. Stir until cheese has melted. Stir onion/bacon mixture into sauce.
Spray a 11x15 pan with non-stick spray. Put green beans in pan. Pour sauce over beans and stir until beans are covered. Spread evenly in pan. Sprinkle on panko crumbs. Bake at 350 for 30 minutes or more or until bubbly.
To prepare the night before, prepare through spreading in pan. Cover with plastic wrap and refrigerate overnight. The next morning, remove from refrigerator and let set about 15 minutes while oven is preheating. Spread panko crumbs over top. Bake at 350 for 45-50 minutes or until bubbly.