Drain cherries, reserving 1 tablespoon cherry juice. Coarsely chop cherries.
Combine eggs, 1 tablespoon cherry juice, milk, and next 3 ingredients in a large bowl, stirring well. Add bread cubes, and let stand 15 minutes, stirring occasionally. Stir in cherries and chocolate morsels.
Spoon mixture into a lightly greased 9" square pan. Bake, uncovered, at 350° for 50 minutes to 1 hour or until set. Serve bread pudding warm or at room temperature. Garnish, if desired.