In medium bowl, mix 1 cup of the flour, the sugar, salt and yeast. In 1-quart saucepan, heat 1/3 cup butter, the water and milk over medium heat, stirring frequently, until very warm (120°F to 130°F). Pour over flour mixture; beat with electric mixer on low speed about 30 seconds or until blended. Beat in egg on medium speed; continue beating 3 minutes, scraping bowl occasionally.
Stir in remaining flour, the Swiss cheese and garlic. (If dough is sticky, stir in 1 to 2 tablespoons additional flour.) Cover; let rise in warm place about 45 minutes or until dough has doubled in size.
Grease 1-quart casserole with shortening or cooking spray. Stir down dough; shape into a ball. Place in casserole. Brush top with softened butter; sprinkle with Parmesan cheese and pepper. Cover; let rise in warm place about 35 minutes or until dough has doubled in size. (If using fast-acting yeast, do not let rise 35 minutes; cover and let rest on floured surface 10 minutes.).
Heat oven to 375°F Bake 30 to 35 minutes or until loaf is golden brown and sounds hollow when tapped. (If loaf browns too quickly, cover loosely with foil during last 15 minutes of baking.) Immediately remove from casserole to cooling rack. Serve warm.