I went to NYU in the 80's, and one of my favorite restaurants was a little Spanish restaurant located just south (10 minutes walk) of Washington Square.
It was a small restaurant, under 10 tables. It think it had dark wood tables, but I am not sure.
I remember they served a great paella with chicken and shellfish. And they had great sangria! I don't think they served any non-Spanish food (i.e. no Mexican or South American or Pizza or Portugese food.)
After I graduated, I was able to go back to the restaurant once in '92, but I haven't been able to go back since. And I've forgotten the name. Now I want to recommend this restaurant to a friend who's visiting NYU, but I can't seem to find it any more. I tried the Village Voice web site, but none of the restaurants in their search engine rang a bell.