Colombian Highlands- Renacer Hostel is a great place to stay in Villa de Leyva. In addition to offering several tours and activities (we did the rappel into La Romero Hole and also rented bikes to visit sites surrounding Villa de Leyva independently), staff provides tons of information about how you can easily do tours and activities on your own. (Julien was particularly helpful, though all staff are very friendly). We rented a small room with private bath on the courtyard which was very affordable and comfortable. The breakfast (run by the hostel) is good and an independent restauranteur also provides good, affordable dinner service. The spacious common areas also provide a great opportunity to meet fellow travelers and get their recommendations for destinations and activities. The hostel is a 25 minute walk from the bus station. Colombian Highlands will deduct your taxi fare ($5000 CP) to the hostel from your bill when you check out. You can't go wrong staying here if you are visiting Villa de Leyva. Highly recommended.
Note: you can make a reservation on their website (www.colombianhighlands.com) where you will pay a small deposit through minihostels.com via credit card to confirm. However, you have to pay the balance due in cash (the deposit is deducted from your bill). There are ATMs near Villa de Leyva's Plaza Mayor (15 minute walk)More