Preheat your oven to 400°F and spray a 9x13 inch baking dish with cooking spray. While the oven preheats, place your shredded zucchini in a fine-mesh strainer and toss with 1 tablespoon of salt. Let it sit for 15 minutes to extract moisture—this is crucial for preventing a soggy casserole. After 15 minutes, squeeze the zucchini firmly with paper towels or a clean kitchen towel to remove as much liquid as possible; don't skip this step as it makes a real difference in the final texture.
In a large mixing bowl, whisk together the eggs, parmesan cheese, and 3 cups cheddar cheese until well combined. Add the garlic powder and stir to incorporate. Fold in the dried zucchini from Step 1 until evenly distributed throughout the egg mixture. Press this mixture firmly into the prepared baking dish, creating an even layer that will serve as your casserole base. Bake for 25 minutes until the crust is set and lightly golden.
While the crust bakes, heat 2 tablespoons of olive oil in a large skillet over medium-high heat. Add the diced onions and sliced mushrooms, cooking for 4-5 minutes until they begin to soften and release their moisture. Add the ground beef and cook, breaking it up as it browns, until no pink remains (about 7-8 minutes). I like to use a wooden spoon to break the meat into small pieces for more even cooking and better texture throughout the sauce. Stir in the bell peppers and cook for another 2-3 minutes, then drain any excess liquid from the skillet.
Pour the pasta sauce into the skillet with the cooked meat mixture from Step 3. Add the Italian seasoning and crushed red pepper flakes, stirring well to combine all ingredients evenly. Let the sauce simmer for 2-3 minutes to meld the flavors together. Taste and adjust seasonings as needed—I find that the Rao's sauce is already flavorful, so you might not need additional salt.
Remove the baked zucchini crust from the oven and spread the meat sauce from Step 4 evenly over the top. Sprinkle the 2 cups of sharp cheddar cheese over the sauce layer. Return the casserole to the oven and bake for 5 minutes until the cheese is just melted and bubbly. Remove from the oven and let the casserole rest for 10 minutes before cutting—this allows the layers to set and makes serving much cleaner.