Lakeview Guesthouse in Penelokan
This was my favourite hostel in Bali where I spent a whole month playing chess for money with the local people to pay for my living (I always won!).
It is located in Penelokan (close to Kintamani) and consists in huts with marvellous views over the volcanoes and a lake (Batur), not far from Denpassar by bemo.
Food is gorgeous and the staffs very friendly. If you stay long enough they will treat you like a family member and will invite you to participate in the Hindu ceremonies to bring food to the gods.
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