Heat oven to 375°F. In large bowl, stir together dry mashed potatoes and hot water. Add cream cheese; beat with wooden spoon or rubber spatula until blended. Stir in Cheddar cheese and bacon.
Carefully remove stems from chiles; cut each in quarters lengthwise. Remove and discard seeds.
Separate each can of crescent dough into 8 triangles. Slightly stretch corners of shortest side of each triangle to make longer. Cut each triangle in half lengthwise to make 32 narrow triangles. Place on 2 ungreased cookie sheets. Place chile at shortest side of triangle. Spoon heaping tablespoon potato mixture into chile. Roll crescent from shortest side to point, wrapping around filled chile; press gently to seal. Repeat to use up dough, chiles and potato mixture.
Mix butter and pepper sauce; brush over tops. Bake 12 to 14 minutes or until golden brown. Let stand 5 minutes before serving.