In a nonstick skillet over high heat bring water, 1 cup evaporated milk, and shells to a simmer. Season with salt to taste. Cook, stirring, until pasta is tender and liquid thickens, 9 to 12 minutes.
In a small bowl whisk remaining evaporated milk, cornstarch, and dry mustard. Stir into skillet. Continue simmering until slightly thickened, about 1 minute.
Remove skillet from heat. Stir in Cheddar and Monterey Jack cheeses in batches, adding water to adjust consistency. Stir in butter, then season with salt and pepper to taste. Makes 6 servings.