Preheat oven to 350 degrees F (175 degrees C).
Bring a large pot of salted water to a boil.
Add potatoes and cook until tender but still firm (for about 15-20 minutes).
Drain and cool.
Peel potatoes and slice 1/4 inch thick. Set aside.
Heat oil in a medium-sized skillet and sauté onion until soft.
Stir in flour, mustard, celery seed, and salt.
Gradually add water and vinegar and cook over low heat, stirring constantly until mixture boils and thickens.
In a mixing bowl, combine the potatoes, green pepper, carrots, and dill.
Add sauce and mix well.
Spoon half the mixture into a shallow 8x8 inch baking dish and sprinkle with half the cheese.
Cover with remaining potato mixture and cheese.
Bake uncovered at 350 degrees F (175 degrees C) for 15-20 minutes, or until cheese is melted and vegetables are heated through.