Saute onion in butter in medium saucepan for 5 minutes or until onion is translucent. Blend in flour and stir over low heat for 5 minutes. Do not brown.
Stir in evaporated milk and water (or milk) over low heat for 5 minutes, or until mixture is smooth and thick.
Combine carrots and celery with chicken stock in medium pot. Cover and simmer for 10 to 15 minutes, or until vegetables are tender. Add to milk mixture. Stir until well blended. Add cheeses, salt, and paprika. Stir until well blended. Cook and stir for 10 minutes, or until mixture comes to a boil and thickens. Add nutmeg.
Garnish each serving with additional paprika, if desired.
The soup is good, eh?