In a large skillet, cook sausage and onion over medium heat until sausage is brown and onion is tender. Drain off fat.
Line a 3-1/2- or 4-quart slow cooker with a plastic slow cooker liner. In prepared slow cooker, combine sausage mixture, hash browns, the 1 cup cheese, sweet pepper, and mushrooms. In a medium bowl, combine soup and the water. Pour over hash brown mixture in cooker; stir to combine.
Cover and cook on low-heat setting for 8 to 9 hours or on high-heat setting for 4 to 4-1/2 hours. Stir before serving. If desired, top with additional cheese and sliced jalapenos. If desired, serve with salsa and/or sour cream.