Visa Application procedure in Dali (as of November 2014)
1.) Take your passport to the front desk of your Hotel/Hostel/Guest House in Dali and let the receptionist or any other person in charge register you online.
2.) Take your passport to the Local Police Station in Dali. Ask your Hotel where the next one is located. The one I went to for example was approx.thread 500 m south of Erhai Gate (Southern End of Renmin Road) on the left side.
At the Police Station show them your passport and ask for a receipt/document. They will look up your registration online and then will print out the little sheet (half Din-A4) for you. You have to sign and then make sure they put a red stamp on it.
3.) You put your passport, the receipt from the local police station, a passport-photo, a short summary of your travel plan for the next month in China (invent anything) and 160 RMB in your pocket.
4.) If you stay in the Old Town of Dali go to the East Gate and wait on the side of the road until Bus #8 is coming from the north. You want to go to the south. Pay 2 RMB and board the bus. It will take approx. 15 min until you will see the often mentioned and impossible to miss Eifel Tower Replica on a big building (PSB) in front of you. You wait until the Bus stops in front of the middle century high school, also a big building just before the PSB and clearly marked by three rings on the front of the school. You walk 100 m further and get into the PSB, where the Visa section will be on your right entering the building.
5.) The guy working there when I applied could speak just a few words English, but nevertheless he was very friendly and helpful. Just give him everything and let him tell you when to pick it up. I wasn't in a hurry, so he said I should come back in 3 working days. I met a french cycling couple though who just came to Dali for the visa and they told him it was urgent so he did it in one day for them.
The visa will start from the day you apply. For example I applied on the last day of my first 30 day visa and so I technically was without a passport and valid visa for 3 days, but then when I picked it up it already started from the day I came to apply.
If you want to go back to Dali just take Bus #8 again from the other side of the road, 20 m north of the big China Tobacco building.
If you need something from a big supermarket which you couldn't find in the Old town of Dali you can take bus #8 towards the city for antoher 10 min and get off right after a bridge over a river, when you will see a huge building on your left that has a big Wal Mart in the basement.
6.) On the mentioned day go to the PSB again and pick up your visa.
Good Luck everyone.