I didn't think it would be a problem to do a web search for a nice ryokan in Shimoda Japan at the last minute...boy was I wrong!
The sites I've been visiting have been deceptive in their pricing. They give one price, but when you try to make the reservation, they tack on all sorts of extras...like huge additional charges if you'd like to use the onsen!.

Here 's what I'm looking for:
Near the town of Shimoda so we can sightsee easily.
Japanese style ryokan with bkfst and dinner included.
Onsen

We are traveling with our 4 year old son and I understand there needs to be a supplement for him but 10,000 yen for his bed and meals a night seems insane.

I'm looking to spend up to 30,000 Yen a night for the 3 of us.

Help...anyone!????

I haven't been to any of these ryokan in Shimoda but I have use Jaapnese Guest Houses before to bokk my ryokan stay and they are reputable. They will help you book a place in Shimoda or the surrounding areas

http://japaneseguesthouses.com/db/shizuoka/index.htm

Aloha!

Mahalo! Unfortunately, the hotels on this website are either too expensive or not near the town. A 20-30 minute taxi ride in Japan can be very expensive so I was hoping to stay close to town. Any other suggestions?

If you don't read Japanese you'll have to use a translation site, but here is a pretty good list. http://www.shimoda-onsen.or.jp/search_result_theme.html
¥30,000 for 3 of you will likely be a bit of a stretch if you expect dinner and breakfast. There is a charge for children over age 3 (usually) that varies whether you want futon and/or kids or adults meal for the child.

This place is in your price range and has plenty of availability (Japanese language reservations page shows that). For English reservations they give phone numbers. http://www.kur-ishibashi.com/top/index.htm