Just a smattering of holiday cottages on the sand dunes, without electricity, water and sewerage, is one of Urugay's hidden gems. There is a hippie community living there, however marijuana is very hard to find there outside of the peak tourist season, and asking around may result in being sold a packet of something else entirely.
By bus from Rocha or Castillos, company Rutas del Sol (UY$ 30). From the bus stop/information centre, take a 4x4 vehicle (UY$ 340 roundtrip) to the village. There is no way to take private vehicles to Cabo Polonio. Its also about a 90 minute walk.
It is also possible to walk from Valizas the next town to the north through the sand dunes or along the beach to get to Cabo Polonio. The shortest route is 6km (10km along the coast) Leave 2-3 hours. Its a very nice way to arrive.
There is a colony of sea lions and seals at the rocks behind the lighthouse. The area is a natural reserve and there is a small forest of Ombu trees called Monte de los Ombues.
Swim in the sea, sunbathe, talk with locals. Be nice. It is a great place to relax and read. It might be obvious but remember to bring hard copy books as charging your ereader might be a task that you just don't wanna bother.
There is very little to buy in cabo polonio. You can get some arts and crafts as well as basic food supplies at one of several small shops.
Bring your own food and cook in the little cabins which are rented and have simple kitchens. There are several restaurants which are only open in the summer, and a handful that are still open after peak season has ended. There is a minimercado with slightly inflated prices, they also accept foreign money
Most people stay in a rented cabaña on the beach (ask around and you will most likely find somebody that knows somebody). That was specially nice if you are in a couple. Prices can vary a lot but a very simple but nice one (one room, bathroom and kitchen with a nice terrace with sea view) in the end of high season cost 1000 pesos. (mar 2015)
Take 3 days and walk to Punta del Diablo, stopping off at the tiny villages along the way. Bring money!