After having spend $182 for lodging near Mendocino the first night, I went to the other extreme and coughed up $29 for a room at the "Sea Star Lodging". Right at the harbor, in the middle of the most touristic part of town. Run by a hippy sort of crowd who were playing around with a out-door fire place. Recommended by "Road Trip USA" too; that is how I found it. No trouble getting a room at 7 or 8 at night: it is easier to travel in early May than in August.
The downside is that I had to share my bathroom with the room next door and clean up my room after me. No problem. Also, I had to use the community phone to check my E-mail. I did pass on an offer to save another $15 and take a simple bunk bed instead.
Possibly the best restaurant in town was next door, also facing the harbor. I had Filet Mignon, very good. Apparently, there is some sort of game room upstairs where you can have dinner too, but I decided on the restaurant donwstairs which had a nice harbor view.