Place bacon in a large, deep skillet. Cook over medium high heat until evenly brown. Drain, reserving bacon grease, crumble and set aside.
In medium bowl, combine sauerkraut, onion powder, crumbled bacon and bacon grease. Stir well; set aside.
In large bowl, beat together 3 eggs, half-and-half, salt, milk and 1/4 cup butter with electric mixer. Stir in flour to form a soft dough. Cover and let rest 5 minutes in a warm place. Grease hands and dough with butter, and knead on a floured surface 10 minutes. Divide dough into 4 sections, and grease each with butter to prevent drying out.
Melt remaining 1/4 cup butter; beat remaining egg, combine egg and butter, and set aside. Roll out a section of dough to a thickness of 1/8 inch. Cut out 4 inch circles with round cutter or glass. Place one tablespoon sauerkraut filling in the center of each circle, brush the edges of the circle with the butter and egg mixture, fold in half and press edges together to seal. Repeat with remaining sections of dough.
Bring a large pot of water to a boil. Cook pierogi for 5 minutes, or until they float to the top.