That is pretty late in the season, but then again these are strange wind times we're in. You are out of tourist season but it is a holiday weekend. There are some B&B that may have something lower priced available, maybe, like:
http://www.duvalgardens.com/
http://www.seascapetropicalinn.com/
http://travel.yahoo.com/p-hotel-1225...ibbean_house-i
All of these have had lower prices at times in the past in that area.
You might find some leads at:
http://www.bedandbreakfast.com/key-west-florida.html
You should be able to count on the diving though, standup and running around the island.
Have fun!