Heat oven to 400°F. Butter shallow 2-quart casserole dish; set aside.
Cook macaroni as directed on package; drain and keep warm.
In large mixing bowl, whisk milk, cornstarch, cumin, paprika, chili pepper, salt and pepper. Set aside.
In large saucepan over medium-high heat, fry bacon until almost crisp. Add onion and garlic; cook, stirring, until translucent. Add milk mixture to bacon mixture and cook, stirring constantly, until mixture thickens. Stir in Colby-jack and 1 cup cheddar. Add green chilies and stir until cheese is completely melted. Add macaroni and stir to combine.
Pour macaroni into prepared casserole dish. Top with remaining 3/4 cup cheddar. Bake 10 minutes, or until cheese topping is melted. Let stand 15 minutes before serving.
Top evenly with remaining 3/4 cup cheddar; bake 25 to 30 minutes, or until cheese is melted and bubbly. Let sit 5 minutes before serving.