We enjoyed a really outstanding meal at Yang Xin Building Vegetarian Kaiseki in Hualien. The owner lovingly prepares and presents eight delicious courses Japanese Kaiseki style and for a very reasonable fixed price per head (we paid around $650 per person plus a percentage tip when we went). This not the cheapest food you will find in Taiwan, but this is half the price of a similar fine dining experience in capital Taipei we'd had a few weeks before and twice as good. Can't really add much to the previous reviews; they accurately said it all.
Be sure to phone a few days ahead to make a reservation; the owner managed to understand my terrible (and very basic) Mandarin to make the booking over the phone, but you may want to ask someone at your accommodation to make the reservation for you. It's well worth the effort though. The owner actually speaks a little English in person and her welcoming personality, her attention to detail and obvious pride in her amazing food speaks volumes.
Updated from previous review on Tuesday October 01, 2013Pros: Excellent interesting flavours, Friendly staff, proud of their food, Simple, unpretentious vibe
Cons: Need to book in advance