When I was in Rethymno, Crete in 2001 I was told about a hostel in a village called Plakias that I should go visit. I went down to Plakias and ended up staying for weeks, and returned several times over the next few years. There is great snorkeling and hiking within walking distance of the hostel. This is one of the best hostels I've been to in many years of travelling.

www.yhplakias.com/

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