Prepare Zucchini: Place the grated zucchini in a colander set over a bowl. Sprinkle with 1 tsp of salt and toss to combine. Let it sit for 15-20 minutes to draw out the excess moisture. After resting, firmly squeeze the zucchini in small handfuls (or using a clean kitchen towel or cheesecloth) to remove as much liquid as possible. This step is crucial to prevent a watery casserole.

Preheat Oven & Sauté Aromatics: Preheat your oven to 375°F (190°C). Grease a 9x13 inch baking dish. In a large skillet, melt 2 tbsp of butter over medium heat. Add the chopped onion and cook until softened and translucent, about 5-7 minutes. Add the minced garlic and cook for another minute until fragrant. Remove from heat and let it cool slightly.

Mix the Filling: In a large mixing bowl, combine the drained and squeezed zucchini, the cooked onion and garlic mixture, sour cream, beaten eggs, 1 cup of the shredded cheddar cheese, and 1/4 cup of the Parmesan cheese. Season with black pepper and dried thyme. Stir until everything is well combined.

Assemble Casserole: Pour the zucchini mixture into the prepared baking dish and spread it into an even layer.

Prepare the Topping: In a small bowl, mix the Panko breadcrumbs with the 2 tbsp of melted butter until the crumbs are evenly coated.

Add Topping and Bake: Sprinkle the remaining 1/2 cup of cheddar cheese and 1/4 cup of Parmesan cheese over the zucchini mixture. Evenly distribute the buttered Panko breadcrumbs on top.

Bake: Bake uncovered for 30-35 minutes, or until the casserole is bubbly and the topping is golden brown.

Rest and Serve: Let the zucchini casserole rest for at least 10 minutes before serving. This allows it to set up properly.