Heat oil in large fry pan over medium heat. Saute onion, red pepper, and garlic 3 minutes. Add zucchini and beef, breaking up beef with spoon. Cook stirring often, until meat loses red color (4 minutes). Stir in half the cheddar cheese, 1 t. salt, basil, and pepper. Reserve.
Preheat oven to 450. Lightly grease 9 x 13 casserole. Bring water, milk, and 1 t. salt to boil. Stir in potato flakes; then beat in egg and rest of cheese. Remove from heat.
Spread half of potato mixture in bottom of casserole. Spoon meat mixture over potatoes; spoon rest of potatoes on top. Sprinkle with parmesan cheese.
Bake at 450 for 15 minutes. Broil for 3-5 to brown top; then let sit 5 minutes before cutting. (If made ahead, heat for 30 minutes at 350 or until center is warm. Then heat at 450 for 15 minutes to brown the top.).