The simple and friendly Climb Hostel has a comfortable bar and a pool table and is enviably close to the entrance to Taishi Shan. The dorms are a bit cramped and have thin mattresses, but are still good for the price. Located in the north of town, it can be a bit tricky to reach on foot, though. Bus 6 runs almost here from the bus station (last stop, then ask directions).
Otherwise, tell the taxi you want the Songyang Academy – the hostel is actually one block east from here and 200m south along Songyang Lu. Don't pay more than ¥10. Staff speak English and lockers available.