In a small bowl combine the yeast, honey, and half cup of water. Stir to dissolve. Let stand until foamy, about 10 minutes.
Mix 1 cup flour with the multigrain cereal flakes, seven-grain cereal and light sugar.
In your bread mixer, combine the remaining ¾ cup warm water, warm milk, oil, granary flour mixture, and the yeast mixture. Add the salt and one cup more of the flour. Whisk hard until smooth, about 1 minute. Let sit, uncovered for 30 minutes.
Add the remaining flour ½ cup at a time, until a soft dough is formed that just clears the sides of the bowl.
Knead the dough by hand until light, springy and smooth, about 2 minutes. Add only 1 tbsp of flour at a time to prevent sticking. It will retain a slightly tacky quality. Place in a deep greased container, turn once to coat the top, and cover with plastic wrap. Let rise at room temperature until doubled in bulk, 1½ to 2 hours.
Turn out the dough onto a lightly floured work surface and divide into 2 equal portions. Form the dough into 2 loaves and place them in the bread pans. Cover loosely with plastic wrap and let rise at room temperature until doubled in bulk, about 45 minutes. 20 minutes before baking, preheat oven to 375°F, with a baking stone if desired.
Gently brush the tops of he loaves with the olive oil. Bake in the lower third of the preheated oven until the loaves are golden brown and the bottoms sound hollow when tapped, 35-40 minutes.
Remove to racks and cool completely before slicing.