Hi Starprotected
You will see from a previous post of mine that I will be staying at Bianco II in October as well. I'll be there from 17th - 20th October. If you are there, look out for me (the intermediate level Spanish spoken with a Scottish accent will be a give away eek )
I've not seen any other reports expressing concern about the Calle de Echegaray - most indicate it is quite busy with a few bars and other hostales/hoteles. I don't think you need be concerned.
If our dates do not coincide, have a great time.