I've stayed at
Hostal López and always highly recommend it.
Hostal Mirentxu seems to be quite nice and typical as well. I haven't stayed at Mirentxu but did take an extensive tour of the place in October 2002. The family who run it are from Galicia, by the way.
Both are located close to one another. López is IN Huertas and Mirentxu is just a little to the north. Good luck and have a great time in Madrid and Spain!
Saludos, MadridMan
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