http://www.casacatrina.com.mx/
Hotel has lovely rooms (see website), excellent breakfasts and a good location very close to Santo Domingo, but unfortunately the appeal ends there. For the price (almost $200/night, though these days all hotels seem to have become quite expensive in Oaxaca for what you get), I expected much more. Sheets and towels were rough, bed was too firm (though that's the case throughout Mexico), pillows seemed to be foam, no radio in the room, and the service, while friendly, was not competent. A complaint about a spraying faucet recieved a promise that it would be looked into, but nothing happened. Another complaint about the awful wi-fi connection received the same. Restaurant recommendations were weak. I feel I should have paid the extra $$ and stayed at Casa Oaxaca which looked very nice from the street.
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