Stayed there for 4 days in May 2008. Excellent food and service and a fine place to stay while visiting shangrila. Breakfast costs Y20 and comes with regular toast and french toast (that's right), eggs cooked to your specification, yogurt, fruit, tea or coffee. Extensive lunch and dinner menu. Also a good place gather information about drivers, guides, and meeting people. There is also a Karma Cafe in Shaxi, Yunnan, run by the same people and that's a good place to visit too.

Its an original Tibetan house free of tourist hype.  A little haven in the back streets of the old town, a very chilled, quiet, original restaurant with great home cooked food either on the terrace or around the cozy fire in the original kitchen (which still has most of its features) or in the Tibetan style restaurant.  Very friendly and efficient staff.  A wonderful place to chill and absorb the atmosphere of this area.  A definite must go!