In a large bowl, mix together the spinach, cream cheese, water chestnuts, vegetable soup mix, mayonnaise and Cheddar cheese until well blended.
Form into a ball, and roll in chopped walnuts. (This is where you can shape it into a christmas tree, cover it in parsley. Use small peices of water chestnuts, and maybe pimentos to use as ornaments.).
If the mixture is too soft to form a ball, refrigerate for about 30 minutes to set.
Wrap the cheese ball in plastic wrap, and refrigerate overnight to blend the flavors before serving with your favorite crackers.