We wound up slightly outside of Cannobio at the Grotto Ticinese, Via ai Grotti 2, 6944 Cureglia. It is easy to find but if you want directions call them at 091-967 1226.

The food was delicious and the prices extremely reasonable. (Smoking is allowed downstairs but if you want a non-smoking area ask to be seated on the second floor.)

You will not find food anywhere as good as this at a reasonable price anywhere in Lugano proper -- and it is only about a 10 minute drive from the heart of town.