Preheat oven to 350 degrees F.
Cook Italian sausage links according to package directions. Cut into 1 inch chunks.
While sausage is cooking, slice bread into 1 1/2 inch slices. Spray or brush with olive oil. Sprinkle with garlic powder. Broil until lightly toasted on each side.
Place toasted bread in a single layer in a 9 x 13 casserole dish.
In a small bowl, combine cream cheese, mayo, Italian seasoning and pepper.
Spread cream cheese mixture over bread, and top with 1/2 the cheese.
Place Italian sausage over cheese.
Pour spaghetti sauce and water over the sausage and top with remaining cheese.
Bake for 30 minutes, uncovered.