Preheat oven to 350 degrees F. Line a baking sheet with aluminum foil (for easy clean up) and place a rack in the pan (I use a rack like you use to cool cookies)
In a large bowl, mix the ground beef, torn bread, water, onion, garlic powder, salt, pepper and egg. Blend well.
Divide meat into 8 equal portions.
Form meatball around a cube of cheese.
Wrap with one slice of bacon, then turn the meatball 90 degrees and wrap in another slice of bacon.
Place meatballs, bacon seam-side down on the rack in the prepared pan.
Bake for 30-40 minutes or until bacon is nicely browned and beginning to look crisp (the bacon won't crisp on the bottom, FYI).
Notes
The bread can be processed into crumbs in a food processor--just pulse about 2 times.