Squash Casserole - with cornbread dressing

2 cups diced yellow squash
2 cups crumbled cornbread
1/2 cup margarine, melted (I use butter)
2 teaspoons dried sage (adjust to taste)
1 (10.75 ounce) can cream of chicken soup
1 egg, beaten
1 large onion, chopped - minced onion flakes will also work
salt and pepper to taste
1/4 cup milk

Directions
1.Wash and cut squash into small slices.
2.Put squash into saucepan and cover with water. Cover and cook over medium heat, until squash is tender.
2.Preheat oven to 350 degrees F (175 degrees C). Lightly grease a medium baking dish.
3.In a bowl, mix the squash, cornbread, butter, sage, cream of chicken soup, beaten egg, onion, salt and pepper, and milk. Transfer to the prepared baking dish.
4.Bake 30 minutes in the preheated oven, or until lightly browned.