Hi there,
Have been to Bali 4X and into diving on a budget. I agree with Tulemben – I have done lots of diving there. My favorite place is called Puri Madha Bungalows. They are to the far north of town. Pass the "public" dive spot and keep going a block or so - there is a very old sign pointing down a dirt road - you will pass a newer dive shop - just keep going towards the ocean.
The place has seen better days but it is right on the ocean, surrounded by a coconut groove and very relaxing. Some bungalows have been remodeled with air con and go for about $22 each. I rent the cheap rooms (and bargain down to $5-$6 - the price includes a simple breakfast). The ones near the restaurant and facing the ocean are large and pretty clean - nothing special except that they have nice porches with chairs that face the ocean.
If you have your own gear you should be able to shore dive here for US $7 per refill - If you are doing multiple dives you may be able to dive with a guide for US $15 (bargain). If Angel is there he is a fantastic guide - but he may have left.
Their rental gear is not worth while so, you can stay at Puri Mada and rent gear from the shop you passed on the left when you walked down the dirt road (can't think of the name). They have some of the best gear in town. Diving is at your leisure at Puri Madha if there are not many guests and after you have explored the wreck & drop off hire a local boat and explore other nearby areas. (I definitely recommend a sunrise dive on the wreck!)
If you're really on a tight budget, you can get very cheap local food in the morning by just facing the ocean from Puri Madha and walking down the beach to your right - there is a little palm hut and local food is something like $.50 or even cheaper. Alternatively, there is an inexpensive tourist restaurant at the public access park just right on the beach from puri madha or there is also a good local place just across from the fancier restaurant in town (left from the dirt road down about 1/4 mile & on the main street) - I think is tastier food too ;-)
Another good place to dive is in Padang Bai. Blue Lagoon is nice, especially at night and certainly cheaper than more distant locations, but be sure to spring for at least one trip to Manta Point – the Manta are beautiful. You can stay at Kerti Inn (walk left from the ferry dock-if you are facing the ocean) about ½ way down you will find Kerti - they should rent the front room for about $5 per night. It is basic but nice enough and beach front with a little porch. There are plenty of inexpensive food joints around if you dodge the major tourist magnets. Lots of dive shops and you should find a decent deal - my shop, Absolute Scuba, is not the cheapest but has a very professional staff and excellent rental gear.
Diving is more expensive than Tulemben, but Manta point is worth a trip & Padang Bai a nicer Bali town than Tulemben – don’t miss Topi Inn (at the far end of the tourist walk).
Cheepest way to dive Mangellan is to stay in Lovina. You should be able to show up in town and find a room for $8 or so - lots of choices for rooms, food & lodging. Just check your guide book.
Tulemben is sleepy but has the cheapest diving!, Padang Bai has a fun tourist strip & a nice village of maybe 50,000? with temples & cultural interests, and Lovina has lots of other tourists & activities tourists enjoy.
It's easy to wing it in Bali, just remember they will always charge tourists about 3X too much. The average working class salary is about $2.50 - $3.00 US per day. Easiest and cheapest way around Bali is by tourist shuttle bus.
Hope this helps! Have a great trip and feel free to email if you have any other questions.