Preheat the oven to 350 degrees.
In a small sauce pan, melt the butter over medium heat. Add the shallots and saute until softened and golden, about five minutes. Stir in the garlic and saute another minute, or until fragrant.
Add the shallots, garlic, cream cheese, sour cream, 1/2 cup cheddar cheese, and 1/4 cup Parmesan cheese to the bowl of an electric mixer. Beat until well combined. Fold in the peppers and crab meat, then stir in the hot sauce, lemon juice, and Old Bay seasoning.
Spread the dip evenly over a baking dish (8 inch square pans or deep dish pie plates work well), and sprinkle with the remaining cheddar and Parmesan cheese. Bake in the preheated oven for 20-25 minutes or until dip is bubbly and cheese is melted and starting to brown. Remove from oven, sprinkle with green onions, and serve with crackers for dipping!