Cook yellow squash and onion in boiling water to cover in a Dutch oven 8 minutes or just until tender; drain squash mixture well.
Combine squash mixture, Cheddar cheese, next 5 ingredients, 1 cup breadcrumbs, and 3/4 cup Parmesan cheese. Spoon into a lightly greased 13- x 9-inch baking dish.
Stir together melted butter and remaining 1 1/2 cups breadcrumbs and 1/2 cup Parmesan cheese.
Sprinkle breadcrumb mixture over top of casserole.