To make Shrimp Stock:

Peel shrimp over a medium stock pot, dropping shells and heads into the pot. Devein the peeled shrimp, cover, and reserve in refrigerator. Pour water over the shrimp shells in the pot, stir in the Old Bay seasoning, salt, peppercorns, red pepper flakes and bring to a boil over high heat. Reduce heat to a medium-low, cover pot and simmer for 1 hour, stirring occasionally. Strain the stock, pressing shells well to extract as much liquid as possible (you should have about 5 cups), and reserve. Discard the shells.

To prepare Grits:

While the stock simmers, stir the grits into a bowl of cold water and allow to settle. Corn hulls may float to the surface. Skim off the hulls and drain the grits. In a medium thick-bottomed saucepan, bring the milk and the 3 cups stock (or water) to a boil over high heat. Add the grits, stirring with a wooden spoon. Reduce the heat to medium, add the salt and cook, stirring occasionally. Once the grits thicken (about 10 minutes), reduce the heat and cook at a simmer, stirring frequently and adding stock (or water) if the grits become too stiff. Cook until the grits are fluffy and creamy, 35 to 45 minutes. Remove the grits from the heat and stir in the butter. Taste, adjust seasoning with salt and pepper, and reserve. (This recipe provides grits for 4 servings.)

To make Shrimp Sauce:

While the grits cook, heat olive oil and butter in a heavy pot or cast-iron skillet over medium heat. Add shallots and cook for 2 to 3 minutes. Slowly add flour. Use a wooden spoon or spatula to incorporate the flour into the oil, stirring until the mixture becomes smooth. Once the roux begins to foam, it begins to brown. (Watch it carefully...do not allow the mixture to burn to bottom of pan!) Continue cooking, stirring constantly, until roux turns to the desired color of a copper penny for a light roux, should take about 5 minutes. (Don't rush the cooking of the roux, allow the mixture to develop at its own pace.) Add shrimp stock, about a cup at a time, whisking well after each addition. Bring to boil, reduce heat to low, and simmer, uncovered, for 30 to 40 minutes. Taste and adjust seasoning with salt.

To prepare Fresh Corn:

With a sharp knife, slice corn off the cobs into a bowl. Using the back edge of the knife, scrape down the cobs to remove remaining "milk? and pulp.

To cook Corn and Shrimp:

Heat 1 tablespoon butter in 12-inch nonstick skillet over high heat. When the butter starts to brown, add corn and spread in pan. Cook over high heat, without stirring, until bottom is lightly browned, about 3 minutes. Toss or stir and continue to cook for about 4 minutes more. Remove corn to a large bowl and set aside. Return skillet to high heat and add 1 tablespoon olive oil. When almost smoking, add shrimp. Cook for 2 minutes, toss, cook for 2 more, toss then cook for 2 more. Remove shrimp to bowl with the corn.

To Assemble:

When sauce has thickened to your desired consistency and is ready, stir in the shrimp and corn. Increase the heat to medium and cook for about 3 minutes. To serve, divide the grits among 4 plates or bowls and ladle the shrimp and sauce on top.