Step 1: Preheat your oven to 375°F (190°C). Lightly grease a 9x13 inch baking dish.
Step 2: In a large bowl, combine the ground beef, breadcrumbs, egg, 1/4 cup milk, chopped onion, garlic powder, 1 tsp salt, 1/2 tsp black pepper, Worcestershire sauce, and 1/4 cup ketchup. Mix gently until just combined; do not overmix.
Step 3: Press the meatloaf mixture evenly into the prepared baking dish. Spread the remaining 1/4 cup ketchup over the top of the meatloaf.
Step 4: Bake for 30 minutes, or until the meatloaf is mostly cooked through and reaches an internal temperature of 160°F (71°C).
Step 5: While the meatloaf bakes, prepare the mashed potatoes. Boil the peeled and cubed potatoes in salted water until very tender, about 15-20 minutes. Drain thoroughly.
Step 6: Return the drained potatoes to the pot. Add 1/4 cup milk, sour cream (or cream cheese), butter, 1/2 tsp salt, and 1/4 tsp black pepper. Mash until smooth and creamy. Stir in 1 cup of the shredded cheddar cheese until melted and combined.
Step 7: Once the meatloaf is partially baked (after 30 minutes), remove the dish from the oven. Carefully spread the cheesy mashed potatoes over the top of the meatloaf. Sprinkle the remaining 1/2 cup shredded cheddar cheese and optional bacon bits over the mashed potatoes.
Step 8: Return the casserole to the oven and bake for another 25-30 minutes, or until the mashed potatoes are lightly golden and the cheese is bubbly and melted.
Step 9: Remove from oven and let stand for 5-10 minutes before serving. Garnish with fresh chives or green onions if desired.