Preheat oven to 350 degrees, butter large casserole dish.
In a saucepan on stove melt butter then add flour to make roux. Add dry mustard and salt, stir well. Add milk and water. Stir until thickened being sure to beat out any lumps with a whisk. Remove from heat and mix in cheddar cheese, cottage cheese and sour cream.
Mix in macaroni.
Place mixture in baking dish, top with grated cheese and paprika.
Bake for 40 minutes or until heated through, bubbling and cheese on top is melted.