In a large pan set over medium heat, melt 1 Tablespoon of butter. Add the ½ cup of onion to the pan and sauté for 7 - 8 minutes, or until soft and translucent.
Add the 2 lbs of sliced squash to the pan and cook for 10 - 12 min, or until the squash is soft. Stir frequently to prevent browning and to promote moisture release.
Place a towel in a colander so your squash doesn't slip through the holes, and place the cooked squash and onions on top of the towel to drain. Drain for at least 5 min, pressing any extra moisture out.
Stir together the drained squash and onion, ½ teaspoon garlic powder, ¾ teaspoon salt, ½ teaspoon ground black pepper, ½ cup sour cream, 1 beaten egg, 1 cup shredded cheddar cheese, and ¼ cup of the shredded parmesan. You'll use the rest of the parmesan in the next step.
Melt remaining 3 Tablespoons of butter. Stir melted butter and remaining ¼ cup parmesan cheese into crushed crackers.
Scrape the squash mixture into a 1.5 qt baking dish (8x8 square or similar)
Sprinkle the butter and cracker mixture evenly over the top of the dish.
Bake at 350 F for 25 min.