when we were there, we stayed in a campground that the railroad ran right through the middle of it. Was way cool. Don't recall the name but it shouldn't be hard to find.
I believe that would be United Campground:
United Campground DurangoWe stayed there several years ago. Not our favorite, but is convenient to the railroad and downtown Durango.
Agree with both Pagosa Springs to the east and Mesa Verde to the west.
Also, don't miss Vallecito Resavoir area.
Agree with the million dollar highway and Ouray, but not for towing unless you are familiar and very experienced. I have decided, so far, not to tow between Ouray and Silverton. Just my personal decision, and I don't hesitate for a minute to cross Wolf Creek or Monarch for example.