We stayed at La Posada del Quinde where this restaurant is located and found the food here to be excellent! My favorite was the enchilada casserole which is actually a vegetarian dish. It was so delicous I ordered it twice during our stay. Breakfasts were hardy and served with a wonderful array of local fruits and the coffee was tops as well. The staff was friendly, warm and always smiling and we had no trouble communicating in our broken Spanish.
The local entertainment on Friday night was a real plus as well. We did try a few other local places to eat but found Cafe Pachamama to be the BEST PLACE in Otavalo. Try it! You won't be disappointed.