We (2) would like to stay near the Puerta del Sol.
I have narrowed it down to three. Hostal Lorenzo , Hostal Marlasca , Hostal Madrid ) Any advice? Thank you

I vote for Lorenzo . I stayed there a few years back and it was like the Ritz Carlton of Hostels. I was very pleased! of course, I haven't been there for a few years, so I'm not sure what it's like now although I can't imagine that it would go downhill too much. I haven't stayed in the other hostels you mentioned, but Lorenzo was very satisfactory in my book. Hopefully it is the same lorenzo that you are talking about I don't know that there is another one.

enjoy your trip!!!!