In a 2-qt. microwave-safe dish, combine the zucchini, yellow squash, onion and water. Cover and microwave on high for 7-8 minutes, stirring once; drain well. In a bowl, combine the sour cream, chilies, pimientos and salt; stir in cheese.
In an 11x7-in. microwave-safe dish, layer half of the squash mixture, half of the sour cream mixture and half of the tortilla chips. Repeat layers. Sprinkle with paprika.
Microwave, uncovered, at 70% power for 7-9 minutes or until heated through, turning dish once. Garnish with additional sour cream if desired.