In large skillet, cook bacon over medium heat until crisp. Remove bacon to a plate lined with a paper towel. Reserve 2 tablespoons bacon drippings. Crumble bacon after cooled and set aside.
In large pot, combine reserved bacon drippings and butter over medium heat until butter has melted. Stir in flour and cook for 5 minutes, stirring constantly. Stir in onion and bell pepper, reduce heat to low and cook for 15 minutes. Stir constantly.
Using a blender and working in batches, combine vegetables and milk. Blend until smooth and return to large pot.
Add the bacon, water, corn, chicken soup, corn, cheese dip, hot sauce, bouillon, garlic powder and seasoned salt. Bring mixture to a boil over high heat. Reduce heat and simmer for 15 minutes.