Heat oven to 350 degrees F. On a baking sheet, arrange bread cubes in a single layer and bake, stirring once, until light golden brown, about 12 min; set aside.

Meanwhile, in a large skillet, melt butter over medium heat. Add mushrooms and cook, stirring occasionally, until golden brown, about 8 min. Stir in sherry (if using). Add leeks, garlic, 3/4 tsp salt and the thyme. Cook, stirring occasionally, until softened. Transfer to a bowl; let cool. Butter a 2 qt baking dish; set aside.

In a bowl, whisk together eggs, cream, milk, cheeses, pepper and remaining 1/2 tsp salt.

Add bread and egg mixture to mushrooms; stir to combine. Transfer to prepared baking dish, cover with plastic wrap and refrigerate 2 hrs.

Heat oven to 350 degrees F. Unwrap dish; bake until golden brown and custard is set, about 50 min. Transfer to a wire rack and let stand 20 min before serving. Makes 8 to 10 servings.