A few blocks west of the parque in a quiet neighborhood is an exceptionally good deal, the
Iguana Azul (tel. 504/651-4620, www.iguanaazulcopan.com [1], US$5 dorm bed, US$11 s, US$13 d), with dormitory beds and small private rooms in a clean, airy lodge. In the back are the communal showers, with hot water, and an area to wash clothes. Lockers are available, as well as free purified water, and reservations are accepted. The lodge is run by the Honduran-American owners of the Casa de Café B&B [2], next door.
Another excellent dorm-style hostel is
En La Manzana Verde (tel. 504/651-4652, http://lamanzanaverde.com [3], US$5 pp), with bunks and even a pair of double beds in a dorm-style set-up. There is a pila for washing clothes, the bathrooms are cleaned six times a day (!), and guests have free use of the kitchen until 10 p.m. Reservations are generally only accepted for groups. Both hostels have a wealth of tourist information.
Links:
[1] http://www.iguanaazulcopan.com
[2] http://www.moon.com/destinations/honduras/western-honduras/copan-ruinas/accommodations/us50-100
[3] http://lamanzanaverde.com