Clear off a large counter space. Cut off 6 to 8 strips of aluminum foil 12 to 15 inches long each and stack or spread out individually on the counter. Cut off about 18 inches of waxed paper.
Grate cheddar cheese using grater disk of food processor.
Place grated cheese in large bowl and add cream cheese, garlic, nuts and cayenne pepper. Work ingredients by hand until smooth.
Divide into 6 to 8 portions. Form into rolls 1 or 1 ½ inches in diameter.
Spread a thick line of chili powder on waxed paper, approximately the length of a roll of cheese. Roll each log until completely coated in chili powder. Add more chili powder as needed.
Place each cheese roll on a piece of foil. Wash hands and wrap each cheese roll tightly in foil; crimp ends of foil to seal. (This is where your helpers can come in. As one person rolls cheese in chili powder, he can put each roll to a piece of foil and someone else can wrap in foil and seal.)
Store in refrigerator for up to two weeks. To keep longer, freeze. Cheese will keep for months in the freezer as long as the foil does not get punctured. The tighter the wrap originally, the less chance there is for breaking the foil.
Place all rolls in a single layer on baking sheet and place on freezer shelf over night. After rolls are frozen, remove from baking sheet and stack for storage.
Serve thinly sliced on mild crackers, such as Ritz. Allow frozen rolls to thaw before slicing.