I stayed at the Beach Lodge when I was there wayyyy back in 2006 - I think it was my first hostel ever on my first solo trip ever (a crazy thought!), and I remember the dorm rooms being clean and quiet but the bathrooms could have been better, and it was up multiple flights of stairs. They did pick me up from the airport for free, which was nice, but I read a couple of reviews that say the pickup isn't offered anymore.
I stayed at the Trekker's Lodge in 2008 (
Trekkers Lodge: Professional Bed and Breakfast and Hostel Operator - they actually have a photo of the bathrooms, haha!) and I remember it being decent and the staff were helpful on my quest to find a rafflesia.
I think a hostel could work fine for you guys, just email ahead and explain your situation and see if they can come up with something or cut you a deal!
Good luck and enjoy Borneo...let me know if you need any more questions answered and I'll try my best!