Went to Yosemite the week before last (just before the rains and snow headed in), from the SF area down through Merced to stay at the Tenaya Lodge.
On the way we stopped at Mel's Old West BBQ in Planada (about 7mi E of Merced on I140). It's literally feet away from the "Welcome to Planada" sign; if you're going there, slow down immediately upon seeing the sign!
.but I wouldn't necessarily recommend it. It's a local hangout, but since the only other food was a Pizza Something, I could see why. We got a beef sandwich, pork sandwich, and fries, and split them. The beef was tasty, but very salty. The pork was disturbingly translucent. Fries were pretty sad, considering they came from a bag... you would think Mel could have cooked them decently. Okay peach cobbler. If you want local flavor and cheap ($.25) beer, I guess it's okay, but stock up on food before hitting it. We both felt somewhat ill afterwards. Not a spot I'd visit again.
Okay, so Mel was friendly. But it looked like there were several non-chains in Merced that would have settled better.
After arriving and recovering... much later, we ate at the Pizza Factory in Oakhurst (next to McD, just north of the 41/49 interchange). The Tenaya "concierge" recommended it; this is apparently the original Pizza Factory (they now have franchises). I, too, heartily recommend it. Incredible sauce, generous toppings. We two split an 8 slice medium, and had two slices left for a snack the next day. I had asked for extra sauce, but shouldn't have, because they're pretty generous with that, too. Concierge said this place gets very crowded Fri-Sun, but on Thu at 9pm it was pretty empty. They deliver, if your hotel accepts that.
The next day we tried for breakfast, having read numerous ads (and online reviews) of a Mexican place named El Cid that had authentic Huevos Rancheros (and other meals). Well, for some odd reason, although they advertise "breakfast all day", "all day" starts at... 11am?? Full page ads in the phone book for breakfast, but they don't serve it in the morning, and don't list hours. Feh. Whatever. A wild goose chase for open restaurants followed, and 45mins later we ended up pulling in to:
Yosemite Forms Mountain House Restaurant (42515 hwy 41), at one of the Bass Lake turnoffs, basically one of the northernmost structures in Oakhurst before you hit really twisty roads. I had a "tamale egg scramble" (sounded unique and was pretty good), she had french toast (generous, with sides of eggs and bacon). Good hashbrowns. Decent coffee too, and nothing was overpriced! I'd come back here again, although I might order something else (black olives and tamales and eggs don't go together in my mind).
Had the leftover pizza in Yosemite, followed by a lunch "snack" at the Ahwahnee Hotel. Mostly we went there because (a) there are few options in the park, (b) it's a *long* drive out, and (c) it's a Scenic Place. I had a turkey sandwich, she the french onion soup. Both were good -- but I would expect better for a $12 sandwich. Even one that comes with cranberry horseradish sauce on the side (tasty, that). The "snack" was about $28 with tip, so we were grateful for the leftovers. If you *did* want a full lunch, be prepared to drop $30 per for just a tolerable meal in fancy surroundings. Dinners are formal (most things are casual in this area). Fun to try, fun to see the hotel, won't be back.
Returned to Oakhurst to try out El Cid in the evening. when they were actually open. Stupidly, we thought 7pm Fri would be an "off" time (compared to 8pm). We had it backwards. Still, as noisy and full as it was, we were seated, waited on, and served almost immediately. Standard Mexican fare, but quite good, given the number of people there. I asked for some hot salsa and was given a bowl of "homemade sauce the cooks like", along with a bottled add-on that went well with it. They were certainly right; the spicy salsa verde went amazingly well with my enchiladas! (the waitress amusedly answered that no, they don't sell the sauce, but she seemed thoughtful, so maybe they'll start if enough folks ask?).
The food there was otherwise pretty standard fare, but well executed and balanced. Both rice and beans were edible (usually I find one or the other too salty or too buttery). Good, strong margueritas. Worth an extra side trip to go there! 41939 hwy 41 (still the far north side of town).
The next morning we stayed at the Tenaya Lodge for a breakfast buffet (in the Sierra Restaurant, acclaimed for its interior design). $15 per. Pretty good for a buffet, not too crowded... but it's hard to get excited over a buffet. More convenient than the twisty 12mi drive to Oakhurst (which we were beginning to dread, having made it five times in the last 40 hours).
On the way out of town, we had an early lunch at The Tea House (across from the Pizza Factory, near 41+49). I guess I should say "snack", although we *did* share a meal. Classic, pretentious English Tea. A good variety of teas, well prepared tea sandwiches, puffs, scones, etc, but a dainty meal -- I could have eaten the largest $13 offering myself if I hadn't gorged on the breakfast buffet. Still, fun for the experience if you're into Teas. Menu online (search for ["Tea House" Oakhurst], top .pdf link). A good selection of teas, and a connecting gift shop sells the teas loose (along with the necessary ancillary paraphenalia).
Drove back, only stopping briefly at a BK for a snack (which you don't need to hear about ;-)).
All in all, decent. We didn't find great food going to/fro South Gate, but if you're staying in that neck of the woods, Oakhurst has some good offerings.