1. When bermuda grows up tall it is growing on vertical stems. When you mow it very low repeatedly, the stems must grow out horizontally under the mower's blade for the plant to survive. When it is tall and you mow it short, all you see is the stems sticking up. All the grass blades are mowed off. When the stems are all growing horizontally the blades come out of those stems vertically and only those get mowed off. If you want to mow at 1.5 inches it is a good idea to scalp it down to 1.25 or 1 inch and let the blades grow out from the shorter stems. Then when you mow at 1.5, you'll be cutting the blades and not the stems.
   

2. You'll have to gradually back off on the frequency and increase the duration until you are back to one inch once per week. Start by skipping an hour and watering every other hour still at 3 minutes. Watch the grass to see if it becomes wilty. Do you know how long it takes to get an inch of water? The next day water about 1/4 inch first thing in the morning and watch it. Then at noon water another 1/4-inch. Repeat at dinner time while the sun's still up. The next day water 1/2 inch first thing in the morning and watch it. If it dries out before the end of the day, give it another 1/2 inch. The following day try waiting until noon and give it 1/2 inch. It might dry out by the end of the day but let it go until the next morning. If it looks good the following morning repeat the 1/2 inch at noon. Repeat that until it looks good in the evening without looking dried out. It should look fine the next morning. Then I would bump it up to 3/4 inch applied in the morning and watch for drying in the evening. If it looks good the next morning, you're on your way. This is a general guideline showing how to gradually switch it. You can change this up as you see it working for you.

Where are you in AZ? If you're in the mountains with pine trees it might make a difference.

Dchall,
Thank you. I have not been very disciplined on mowing. I was letting the grass grow to 3-4 inches, or longer before mowing. If I keep on mowing at 1.25 inches should the grass eventually grow horizontally and green up?

I am in Chandler, not anywhere near the mountains.

Dchall can answer this better then I can but I think if you mow at 1.25 inches, the grass will be greener then if you let it grow tall and cut it back to that. His advice to cut lower then you plan on maintaining it is dead on. As far as maintaining it at that height causing it to grow horizontally..........I don't know.

Do you have a rotary or a reel mower? Is your property perfectly flat or are there some imperfections? I wasn't able to cut my lawn consistently in the 1 inch range without scalping until I got a reel mower during the winter. If you have a rotary and your lawn isn't flat, you will have a hard time cutting it below 1.5 inches without getting the scalped/crop circle look.

It should be green as opposed to brown and stemmy. Keep after it and be a little patient. The more you mow bermuda the better it looks.