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Beachfront condos won't be cheap, but for budget minded accommodations not too far south of town I've always been happy with the Superior Oceanview rooms at Villablanca and I've also enjoyed staying at Casa del Mar.
Villablanca superior rooms are running $58-60 on Orbitz, Expedia, etc. Casa del Mar is just a little more but I think right now it's in the $65-70 range.
If you want to be right on the water then look at Caribe Blue or Hotel Barracuda. Both have reasonable dive/hotel packages with their on-site operators.
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