Mix the meat mixture, parmesan cheese, egg, onion, and the seasonings. Mix water with the tomato paste until a desired consistancy, similar to tomato sauce. Add about 1/4 of the tomato paste mixture to the meat mixture. Place in a round casserole dish. Spread out the mixture to make a well. Place the cheddar cheese and bacon in the well. Use the rest of the mixture to cover the cheese mixture so that it is in the center of the meatloaf. Bake on 375 degrees until completely cooked or about 1 1/2 hours. During the last 15 minutes of cooking, pour off any liquid and then pour the rest of the tomato mixture to coat the meatloaf. Sprinkle with a little more Italian seasoning, if desired. Everyone will get a surprise when the meatloaf is cut and gooey cheese oozes out.