There is a very nice western standards hotel in Damak - Hotel Kamakshya. They have a facebook page so you can search there. I think I paid about $35/night for a room that accommodated 3 people. Had AC/clean sheets/wifi etc. There is also a good restaurant in the hotel. I didn't reserve anything - just rocked up and getting room was no problem.
You could also get a local hotel for around $10/night but don't expect AC or clean sheets.
If you fly to Kathmandu you can take a microbus with guaranteed seat to Damak. Cost is $15 and the trip takes about 10-12 hours. I took from Damak to Ktm and they dropped us on the ring road just west of Koteshwor Chowk. There are many shops in that area selling bus tickets so I assume that's where you would get the bus. Worth checking though since there was something in paper sometime back about moving those busses off the ringroad.
If you do take a bus to Damak (local bus or micro bus) you should ask to be dropped off at the Gorkha Dept Store - it is nicer than arriving to the chaos of the bus park. The hotel mentioned above is just a couple of minutes walk from the dept store.
Cheers,
Mick
