Deep in the Colorado Rockies, a ghost town has been brought back to life as a resort—where the saloon serves cilantro risotto and a pony express stop is now a yoga studio

Across a snow-covered field 9,000 feet up in the Rockies, my wife and I spot Clint Eastwood in a flat-top cowboy hat and gray-and-black serape, puffing a cigarillo as he stalks an Old West landscape. It could be a frontier town film set: a cluster of dilapidated timber shacks, a saloon, a tepee, and two hot-springs pools hidden in clouds of steam. It's easy to imagine that at any minute, a gang of desperadoes on the hunt for cheap liquor and loose women will ride across the wooden bridge over the Dolores River, a-shootin' and a-cussin'.

Barbara and I have been at Dunton Hot Springs for only a day, and no one warned us how hard it can be to breathe—or even think—at this altitude. Or did we stay in the hot springs too long?After a 15-minute soak in 106-degree water suffused with intoxicating but healing lithium, we can't be sure what's what.

Yet this is no movie: Dunton Hot Springs is a former ghost town in the shadow of Colorado's Mount Wilson, 30 miles south of Telluride. We soon find out that the Clint-like character is actually one of the owners, Bernt Kuhlmann, who hails from Salzburg, Austria. A hundred years after Dunton's heyday, when it had both a bordello and a schoolhouse, Kuhlmann and his German business partner, Christoph Henkel, have transformed the town into a luxury wilderness resort. It's an idealization of frontier America; a grand illusion; a trip back in time, with all the modern conveniences.

As we drove up the west fork last Thanksgiving, the town appeared over a rise, looking just like what it had been for decades—a wretched wreck of abandonment. Then we were led to one of the seemingly ramshackle cabins, and Dunton was revealed as a Potemkin village turned inside out, its postcard-imperfect façade hiding a heart of gold, with a bed like a cloud, a blazing fireplace, and our very own hot spring—fed tub, big enough for five. Though the three-day blizzard that had just begun would turn our planned hiking trip into an indoor event punctuated by brief stumbles outside, we knew we were still in for an adventure.

Dunton's story, full of twists, turns, and not a little adventure, is what attracted us. Founded in the 1890's for workers at nearby gold mines, the town grew to 500 people but was deserted by 1918. Though resurrected that year as a dude ranch, it soon fell into disuse and remained so until it was sold to a group of Wall Streeters in 1973. They couldn't decide what to do with it, so a bartending caretaker who traded beer for admission to the hot springs helped usher in the town's second ßing with notoriety. Motorcycle gangs, hippies, and nude volleyball aficionados promptly overran the town, many of them carving their names into the saloon bar beside the apocryphal signatures of Butch Cassidy and the Sundance Kid (who supposedly passed through after robbing their first bank). Dunton remained lawless into the eighties.

"You wouldn't come here unless you had a gun and had it showing," says Billy Joe Moffat, one of the former owners, who still lives nearby in a stove-heated cabin. By the time Kuhlmann and Henkel arrived, in 1994, the metal roof of the bathhouse was riddled with bullet holes and there were elk carcasses in the freezer. Spotting charm where others might see only caved-in roofs, rodents, and a total absence of amenities, Kuhlmann and Henkel took all of 15 minutes to decide to buy the town. They ended that day in the hot springs, "bubbling away," Kuhlmann says. They never left.

It makes an odd sort of sense that today's Dunton was created by Europeans, who have a pure view of the myth of the West, untainted by proximity. It figures, too, that Kuhlmann and Henkel came to Colorado via Hollywood; after all, reinvention is that town's religion. Henkel, an heir to a German detergent fortune, spent childhood vacations in his family's Tyrolean hunting cabin but ended up producing movies in L.A., where he met Kuhlmann, an aspiring screenwriter, actor, and devout fan of Karl May, Germany's best-selling author of novels set in the American West. After losing his own small inheritance in bad movie investments, Kuhlmann told me one night over dinner, "I had to start from scratch like every other good American." This led to Colorado, where he worked in real estate and dreamed of developing a ghost town. Henkel shared the fantasy—he'd even bought a ranch in Telluride.

Dunton was originally conceived of as a hideaway, a grand bachelor pad amid the high pines. But the costs of renovation and upkeep induced Kuhlmann and Henkel to share it, first as a corporate retreat, then, starting in 2001, with paying guests. The resort has already attracted quite a following: Caroline of Monaco and Daryl Hannah have stayed here; neighbor Ralph Lauren pops in for lunch. But Dunton is so isolated and cosseting (Henkel calls it "a private house grown too large for a private family") that even with the maximum of 30 guests around, you still feel you have it to yourself.

Kuhlmann, the creative force behind Dunton, isn't always there, but his eccentric personality is ever-present in the eclectic décor. He furnished the lobby with fixtures from an old post office, and turned a pony express stop from the nearby town of Parachute into a yoga studio. A barn from Durango became a lavish library with a fireplace, oversized cracked-leather armchairs, and a bearskin rug. Kuhlmann searched five states to find eight period cabins to replace Dunton's ruins, and had them rebuilt with the latest comforts, like smoked-glass showers and heated stone ßoors. There's an 18th-century Rajasthani matrimonial bed in one, a beaded native American coat hanging as art in another.

Meals are served in the saloon, next to a big fireplace and the open kitchen. On Sunday morning, as the snow piled up, one of the guests asked chef Ty Hunt (whose résumé includes stints at a restaurant in Latvia, Cibolo Creek Ranch in west Texas, and the U.S. Embassy in Moscow) if there would be enough to eat. "Does the Donner party ring a bell?" he joked. "We've got enough food for days." Indeed, Dunton's kitchen turned out a wild variety of dishes: salmon with cilantro risotto, seared scallops in a mango-citrus salsa, huge steaks from locally raised cattle, and a half-dozen types of bread. For Thanksgiving dinner, Hunt made sourdough sage stuffing, cranberry and Granny Smith apple sauce laced with ginger, and three turkeys (leftovers were turned into smoked turkey—and—white bean chili soup). The only thing wrong with the food was that there was just too much of it.

In good weather, when the mountain pass is open, some guests take day trips to Telluride, a 40-minute drive, or Mesa Verde, once the center of Anasazi civilization and now a living museum and working archaeological site 90 minutes southwest. Around Dunton itself, you can go heli-skiing (the copter lands in front of the saloon), snowshoeing, cross-country skiing, hiking, and, in warm months, horseback riding in the woods or trout fishing on the Dolores River. Locked in by snow, we found that the resort alone had more than enough entertainment. Steps away from our cabin we found bliss at the bathhouse—with its steam room, hot tub, and exotic massage loft suspended in twisting indoor tree trunks—and at the two outdoor hot springs. There's an alfresco pool next to the bathhouse and a spring hidden inside a tepee guarded by lethal longhorn steer skulls. Swimsuits are optional.

Dunton's service is thoughtful and personal; on the hour-long drive up from the airport in Cortez, one of the managers shared his tip for staving off altitude sickness: drink, drink, drink water. The morning after the blizzard began, a housekeeper delivered hats, gloves, and pants-protecting gaiters to our cabin, since we were unprepared—and thus housebound.

We felt like mining barons, and we couldn't get over having the run of an entire frontier town. But in the end the real luxury was what had been there all along: the views of far-off Mount Sneffels, the tall pines scraping the snow clouds, and the pure geothermal water that ßows into Dunton's faucets. We drank it all in and thirsted for more.

Dunton Hot Springs, 52068 West Fork Rd., Dolores, Colo.; 970/882-4800;; doubles from $400, including meals.