Combine first 3 ingredients in a saucepan; cook over low heat until morsels and butter melt, stirring occasionally. Remove from heat, and stir until smooth. Pour chocolate mixture over cereal, stirring to coat evenly. Spread cereal mixture on 2 wax paper lined jelly roll pans; let cool 1 hour. Sprinkle mixture with powdered sugar; stir to coat evenly.
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