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Combine water, butter, salt, milk, onion, and potato flakes in a microwave-safe bowl. Cover and microwave 4-5 minutes.
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Cook noodles according to package directions, then drain.
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Layer half of the noodles on the bottom of a glass baking dish. Put on 6 slices of american cheese.
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Then spread on top half of the mashed potatoes. Sprinkle with all of the cheddar cheese.
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Layer on the remaining potatoes.
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Top with the remaining noodles. Cover the dish with foil.
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Cook 20 minutes at 350 degrees, while covered.
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Then uncover and place 6 slices of american cheese on top. Bake an additional ten minutes uncovered.