Stay in rental houses that were once fancy palaces, sit on the verandas and watch the world move slowly by. Head for the donkey sanctuary, not an official tourist attraction, which is exactly why you should go. If you walk far enough away from the local beach, you can shed your bathing suit. Watching donkey races. Expat homeowners, hippies, globetrotters.
Cars are virtually nonexistent.
Relax, it's not beyond your keg-party budget. Prices vary during peak seasons, which are December to January and July to August. String of obnoxious contemporary hotels along the beach. Whenever you get there. The ultimate fusion of Mexican-gringo fiestas is an annual November 4 bash called Noviembre en Puerto Escondido, which features polo matches played with brooms on burros.