Preheat oven to 350°F.
Cut tops off peppers and remove seeds & membrane. Set aside.
Prepare rice according to package instructions (2/3 cup uncooked rice yields about 2 cups cooked).
While rice is cooking, brown Italian sausage, onion and garlic in a large skillet until no pink remains. Drain grease.
In a medium mixing bowl, stir together cooked rice, Italian sausage, diced tomatoes, 1 ½ cups cheese, and 2 Tablespoons parsley.
Spoon mixture into peppers, filling them completely.
Place stuffed peppers into a 9x13 inch baking pan. Add 1/4 cup water to the bottom of the pan.
Top peppers with remaining 1/2 cup cheese.
Cover with foil; bake for 30 minutes. Remove foil and bake 10 minutes more. (*For softer peppers, bake for 45 minutes, then remove foil and bake for 10 minutes more.)