Isla's (sorry I'm not sure of the spelling) is a great seafood restaurant on the Malecon. They serve a shirmp cocktail with the biggest prawns I have ever seen!
Del Borachos (again sorry about the spelling) is a great hamburger joint just outside of town, it is a must everytime we go to Loreto.
I was just in Loreto this past weekend and it's fine. I worked a large public event well attended by the locals.
I had a nice dinner in Terraza a few years back and they're still around.
McLulu's for baja fish tacos.
Not a lot of options in Loreto but if you look around you'll find some nice seafood spots.Love Loreto, stayed in the new La Mision hotel on the malecon, very nice.
Mariana is right about the damage done to Mulegé and Loreto by the hurricane. But when things get back to normal, here are a few recommendations:
Mulegé: The restaurant in Hotel Serenidad (south of town) and restaurant El Candil (downtown).
Loreto: Any of the palapa restaurants south of the zocalo that serve deep-fried crabs and Terraza Restaurant (second floor) just off the zocalo, and the fancy European/Italian restaurant in the hotel just across the street from the zocalo (La Posada de los Flores ?) whose name, I think, is Vecchia Roma. The chef/owner of VR takes a month or so off every year to return to Italy to eat, drink, learn, and "recharge." He closes the restaurant during that time and, I fear, that might be the month of January. Maybe someone else can confirm or correct this information.