Preheat oven to 375°F and butter a large 3-quart casserole dish.
Melt butter in a large skillet over medium-high heat until starting to foam. Add mushroom and cook until lightly browned and the moisture has evaporated. Add minced garlic and continue to cook, stirring often for 1-2 minutes. Set aside.
While mushrooms are cooking, whisk together cream, sour cream, salt, pepper and nutmeg. In a separate bowl whisk together milk and flour until smooth. Add to the sour cream and cream and whisk until incorporated. Grate the cheese and set it aside.
Peel and thinly slice potatoes. Spread half of the potato slices evenly in the bottom of the prepared casserole dish. Scatter half of the sauteed mushroom and half of the cheese evenly over the potatoes. Repeat with remaining potatoes, mushrooms and cheese.
Pour cream mixture evenly over potatoes. Give the pan a gentle shake to help flatten everything out. Cover and bake for 45-60 minutes (this will depend on how thin you've sliced the potatoes) Start checking at 45 minutes. The potatoes should be almost tender in the center. Remove cover and bake for an additional 20 minutes until the top is golden.
Remove from oven and allow to rest for 10 minutes before serving. Garnish with chopped fresh parsley or sliced green onions if desired.