I've dived a couple of times in Gulf of Papagayo and found the diving as described -- i.e., a lot of marine life, very little pretty coral, and medium-to-poor visibility. I have stayed at Ocotal Resort; it is pretty nice, high on a hill with great views as Vintagediver said and with a decent restaurant, but it requires a cab ride to get into Playa del Coco. Some of the dive shops in Playa del Coco have deals with small hotels near town. These places aren't plush, but they're not bad. I dove with SummerSalt, which has a deal with a small hotel about ten minutes walk from town; it has a just amazing Italian restaurant -- I would NEVER have supposed that to be the case. Rich Coast Diving is another dive op that has hotel contacts (I haven't used that op but it gets pretty good reviews).
One diving "trap" in Playa del Coco is that there are three basic dive areas: (1) the "local" dives; (2) the Cat[alina] Islands; and (3) the Bat (Murcielogos?) Islands. The local diving is okay -- a lot more marine life than Coz, IMHO -- but nothing spectacular. The great diving is at the Cats and Bats, and at a pinnacle called Blackrock that usually is the third dive on the way back from the Bats. The 3-dive trips to the Bats and Cats are significantly more expensive (I think $125 or so) than the local dives. The Cats are about an hour boat ride, and the Bats about 1.5 hours. The Bats are known for bull sharks; I've been to the site five times, and have never seen one (but everyone says "Oh, you should have been here yesterday -- we saw ten of them"), though I have seen quite a few mantas there. The Bats also is tough diving, with fairly low viz and lots of surge and current, and probably a rocking boat between dives. Blackrock is a truly outstanding dive site, one of the best I have ever seen for marine life (and that includes Indonesia), but also is subject to low viz.
In a nutshell, great diving for marine life, some tough conditions periodically, decent hotels, good dive ops, and not terribly expensive. If you go there, PM me with the details since I may go there in mid to late August.
One diving "trap" in Playa del Coco is that there are three basic dive areas: (1) the "local" dives; (2) the Cat[alina] Islands; and (3) the Bat (Murcielogos?) Islands. The local diving is okay -- a lot more marine life than Coz, IMHO -- but nothing spectacular. The great diving is at the Cats and Bats, and at a pinnacle called Blackrock that usually is the third dive on the way back from the Bats. The 3-dive trips to the Bats and Cats are significantly more expensive (I think $125 or so) than the local dives. The Cats are about an hour boat ride, and the Bats about 1.5 hours. The Bats are known for bull sharks; I've been to the site five times, and have never seen one (but everyone says "Oh, you should have been here yesterday -- we saw ten of them"), though I have seen quite a few mantas there. The Bats also is tough diving, with fairly low viz and lots of surge and current, and probably a rocking boat between dives. Blackrock is a truly outstanding dive site, one of the best I have ever seen for marine life (and that includes Indonesia), but also is subject to low viz.
In a nutshell, great diving for marine life, some tough conditions periodically, decent hotels, good dive ops, and not terribly expensive. If you go there, PM me with the details since I may go there in mid to late August.