Heat 1 tablespoon olive oil over medium heat in large skillet. Add onion; sauté until soft. Add garlic and chorizo slices. Cook, stirring constantly, until chorizo begins to render some fat.
Add potatoes, salt and pepper to taste and chili powder, if desired; stir to coat. Sauté about 5 minutes; add tomato sauce and 2 tablespoons water. Cover loosely; reduce heat to medium-low. Cook, stirring occasionally, about 20 minutes or until potatoes are tender.
Meanwhile, preheat broiler. Brush bread with additional olive oil. Toast under broiler until crispy; sprinkle with parsley, if desired. Place bread over potatoes and serve from skillet with fried eggs on top, if desired.
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