Preheat the oven to 375°F (190°C).
In a large skillet, heat olive oil over medium heat. Add the breakfast sausage and cook until browned and fully cooked, about 7-10 minutes, breaking it into smaller pieces.
While the sausage is cooking, wash and dice the potatoes into bite-sized cubes.
In a mixing bowl, combine the cooked sausage, diced potatoes, milk, sour cream, garlic powder, onion powder, and half of the cheddar and mozzarella cheeses. Stir until well mixed and season with salt and pepper.
Transfer the mixture to a baking dish, spreading it out evenly.
Sprinkle the remaining cheddar and mozzarella cheese on top of the potato and sausage mixture.
Cover the baking dish with aluminum foil and bake for 30 minutes.
After 30 minutes, remove the foil and bake for an additional 15 minutes, until the cheese is bubbly and golden brown.
Remove from the oven and let it cool for a few minutes. Garnish with fresh parsley if desired before serving.