Preheat the oven to 350°F (175°C). Lightly grease a deep 9x13-inch baking dish and set aside.
Heat the olive oil in a large skillet over medium-high heat. Add the chopped onion and cook 2 minutes until softened.
Add the ground beef to the skillet and cook, breaking it up, until no longer pink; drain excess grease.
Return the skillet to medium heat and stir in the minced garlic, chili powder, cumin, smoked paprika, dried oregano, salt, and tomato paste; cook 1 minute to toast the spices.
Stir in the refried beans, 1 1/2 cups salsa, 1/2 cup water, and chopped green chilies; cook, stirring, until the beans are fully incorporated and the mixture is cohesive. Add cayenne if using; remove from heat and set aside.
In a medium bowl, whisk together the sour cream, softened cream cheese, 1/2 cup salsa verde, and a pinch of salt until smooth to make the creamy filling. In a separate bowl, combine the grated Monterrey Jack and cheddar cheeses.
If desired, char the corn tortillas over a gas flame or in a hot cast‑iron skillet until they have light dark spots; this makes them more pliable.
Spoon 1/2 cup of the reserved salsa into the bottom of the prepared baking dish and spread into a thin, even layer.
Arrange a layer of tortillas: place 2 whole tortillas in the center and surround with 6 tortilla halves to cover the dish. Spread one-third of the creamy filling over the tortillas, sprinkle with 1 cup of the combined cheeses, then spread one-third of the meat mixture on top.
Repeat the tortilla, creamy filling, cheese, and meat layers two more times to use all of the creamy filling and meat mixture.
Top with a final layer of tortillas, spread the remaining salsa over them, and sprinkle with the remaining cheese.
Cover the dish and bake 30–40 minutes until the casserole is heated through and the cheese is melted. Let stand 10 minutes before cutting.
Top servings with lettuce, tomatoes, olives, avocado, cilantro, jalapenos and additional sour cream as desired; serve with Nacho Cheese Doritos if using.
