take the short ride up to Bethany, turn left on route 26 and in a 1/4 mile on the right is an outstanding high end Italian restaurant called Defebo's that is IMHO one of the best restaurants at the beach and would also easily be able to hold its own if it was in DC. Call to make reservations.
All the food is excellent but they make a very good veal chop
Defintely go to Faustos, Chef Fausto Carli has to 2 locations in Ocean City, Here is the website. http://www.ristoranteantipasti.com/
They have been on the Food Network as a top 5 Italian restaurant in the US. The food here is incredible, The Pasta dishes along with the Steak and Seafood dishes are all superb. I have been to this restaurant atleast 25 times and this is one the best Restaurants in the US.
I would recommend the Garlic Steak, Rack of Veal or Any pasta dish, especially the Gnoochi, the Focaccia bread is out of this world, as are the cannolis. This is a truly special dining experience, You feel like you are dining in Italy.