Desert song - Is this where the Eagles found their heaven or Hell?

On a dark desert highway/Cool wind in my hair (OK it was a sunny morning and the breeze more a hot blast from a hairdryer), I was heading towards the little Mexican town of Todos Santos in search of an urban, or rather desert, legend. This was Baja California, the skinny strip of land that dangles off the bottom of California, and in Todos Santos, my guide confided, was the bona fide, real-life Hotel California where Don Henley wrote those immortal lines, in a tequila-and-drug-induced haze, back in '76.

The Eagles, he went on, were draft-dodgers, escaping conscription for the Vietnam War (mmm, not very likely. American involvement in the war ended in 1973). They just hit the road and drove, heading south on the Pacific Coast Highway, or Highway 1, which snakes down the Californian coast and continues over the Mexican border for another 1,000km or so. The end of the line was supposedly the sleepy little town of Todos Santos. The story has been told so often, it's become local lore. However, Don Henley denies ever having set foot in either the Hotel California or Todos Santos. My research had dredged up a copy of a fax he'd sent posted on the internet, vehemently refuting the claim. Pulling up in front of the ramshackle old building, the Tequila Sunrise Bar over the road, it all felt like a bit of a set up. Especially when the girl behind the desk tried to relieve me of $5 just to get past reception.

The story not told in Baja, or at least not by my guide, is that it was all a con dreamt up by the enterprising hotel manager to bring tourists and their revenue to this little backwater. Hotel California had more of a cash register-style ring than Mision de Todos Santos. Highway 1, completed in 1973 and screeching to a halt in the glitzy tourist resort of Cabo San Lucas, just before it careers off the edge into the Pacific, also bypasses Todos Santos altogether. The town is actually on Highway 9. But, hey, what's a slight detour? One long, dusty road across a cactus-strewn plain looks much like another. And it worked. Articles in newspapers in the US prompted a trickle of tourists to venture north from Cabo, which had already been "discovered" by America's glitterati.

Over the road in the Tequila Sunrise, every inch of wall space is covered with graffiti, including the autographs of Jack Nicholson and Pink Floyd – although you can't help wondering if they're part of the hoax too. Next door is the obligatory souvenir shop where you can pick up a Hotel California T-shirt and other memorabilia for a few bucks.

The rest of Todos Santos seems unfazed by the hype. The deserted, dust-baked streets, lined with pretty pastel-coloured buildings, seem to snooze in a never-ending siesta. The town was founded by Jesuits in 1723 and, apart from a local rebellion in 1840 (after which it was abandoned) and a brief revival of fortune in the late 19th century when sugar was produced here, it's never had much of a claim to fame. Until recently. Apart from a pilgrimage site for deluded Eagles' fans, its appeal today for daytrippers from Cabo lies in its contrast to the tackier resorts in the south – and its reputation as the centre of the growing Baja art scene.

Over the last decade, an influx of American artists from Taos and Santa Fe in New Mexico has turned the town into a thriving artists' community. There's even a week-long art festival every February, when presumably things get a bit livelier. One of the galleries lining the dusty streets belongs to the American artist Charles Stewart; the late Hollywood film star Anthony Quinn was a collector of his work.

The artist's low-slung home, through a creaking gate and circled by a shady, covered verandah decorated with his paintings, dates back to 1810. Stewart is over 80 and still prolific. In paint-spattered overalls, brushed-back grey hair and huge glasses, he epitomises the eccentric artist as he regales me with anecdotes from the Battle of the Bulge. Born in Ohio in 1922, he fought in the Second World War with the 607th tank destroyers, and was involved in the D-Day landings. After the war he studied art in New York before moving to New Mexico, settling in Taos in the Fifties. He headed south when Taos became "too crowded", spearheading the establishment of Todos Santos as an artists' colony.

Back in Cabo, just an hour down the road, there's a very different crowd and atmosphere. The Hollywood set upped anchor and sailed their yachts south after the Second World War following reports from American pilots of crystal-clear waters and whales spotted beneath the surface. Today, what was once a tiny fishing village is a bustling resort and internationally renowned sport-fishing destination. The waters around here teem with blue marlin, swordfish, tuna and sailfish, while the harbour is bursting with flash yachts. Cabo still attracts the rich and famous in their droves. Keith Richards got married in Baja a few years ago and Madonna bought a house here too.

The Sea of Cortez, which divides Baja from the rest of the nation, bestows the peninsula with a strange identity. Down here on the very tip, it feels like an uneasy alliance of gritty Mexican and moneyed Californians.

It's easy to forget the sheer scale of the peninsula. Although Los Cabos or the Capes (made up of Cabo San Lucas and San Jose del Cabo) is now a sprawling development (Highway 1 will soon be four lanes wide), most of Baja is still empty.

Wanting to experience desert rather than highway or beach, I tracked down Cesar, who claims to be the only native Baja guide (the others, he said, have flooded in from Mexico City for the tourist dollar). Cesar had an arranged marriage at the age of 15 and grew up on a goat farm in the mountains where his 94-year-old grandmother still knocks back a daily concoction of powdered rattlesnake (it's good for the heart he tells me). More Baja blarney? Somehow I don't think so. His knowledge of the area and its flora and fauna is encyclopaedic, his passion for the peninsula tangible. Turning on to a rutted track past San Jose del Cabo, the wheels of the jeep whipped the dirt up around us as we almost ran over a wild cow – right next to the plot Martha Stewart, America's home-style guru, is rumoured to be buying.

Beyond the growing sprawl of flash hotels crammed with vacationing Americans is the edgy heartland tucked out of sight from Cabo San Lucas with its Dunkin' Donuts, Baskin Robbins, Hard Rock Café and tacky gift shops full of oversized sombreros. The wild cattle are not really wild of course, they're branded and allowed to roam free because their owners can't afford to feed them.

Being a free-range cow in Baja is not as great a deal as it sounds. There's no grass, just tumbleweed and rosemary bushes. What greenery there is, they can't eat. They scavenge among the bins like wild dogs, eating rubbish. A bale of hay costs 100 pesos (£6), a small fortune for the Mexican owners, Cesar tells me, so they keep one cow and one bull and fatten them up and sell them. Then they go and round up another two and do the whole thing again.

This piece of desert is known as Cape Gorda or the Fat Cape, which is fitting as it's full of fat-cat Americans. Four-wheel drives roar past, flying over the bumps, driven by Santa Cruz-style Americans with shaggy blond hair and long shorts, surfers who camp on the wild beaches. The other migrants to Cape Gorda are the millionaires who have bought up the land in large plots, lacing it with shiny barbed wire and hammering Private Property signs into the ground. These new owners don't want the road paved, Cesar continues, as each bump sends a jolt up my spine. They want to keep some distance between their exclusive beachfront properties and the hordes down the track. They don't need a road as most have their own airstrips. They fly into San Jose del Cabo and then jump into a little hopper plane for the final leg to their homes, mini oases in the desert.

The coastline along the Sea of Cortez is still wild and rugged, and very different from around Cabo San Lucas, where the last 10 years have seen development on a massive scale. But this pristine coastal desert wilderness will eventually be built up, according to Cesar. The scruffy Mexican smallholdings, caravans, tethered goats and donkeys are gradually being edged out.

Cesar is philosophical, but then he has a contingency plan. His ranch is in the national park, about two hours north by car – then an eight-hour hike from the road. US universities send students to him every year for hiking trips in the backwoods. In five years or so he plans to retreat into the mountains, battening down the hatches, building a few cabins for those who want a different kind of holiday experience.

As we alternately walk and drive he points out turkey vultures, coyotes and the holes of the lethal black widow spiders. His sharp eyes spot a tiny white flower and we screech to a halt. The Damiana plant is a herb native to Baja. Rubbing it into my palm releases a delicate aroma. Made into a liqueur it's a good digestif, as a tea it's used for stomach upsets. It's also regarded as an aphrodisiac. Cesar intersperses history (the native Indians around here used to bury water in sacks taken from dead pelicans' beaks) with geology (Baja is still technically an island after breaking off from mainland Mexico). His last tour was for a group of American bat-watchers. Bats are more important than birds down here for pollinating the cacti, he explains.

At sunset the light fades quickly. Suddenly we are on a dark desert highway. The air is now cool. We've been on the road for hours and Baja no longer feels over-developed. It's easy to leave the encroaching sprawl behind. Up ahead in the distance I see the shimmering lights of Cabo.

Cesar drops me back at my hotel, Las Ventanas Al Paraiso, or "windows on to paradise", a sleek designer bolt-hole on the coast. The view from most of the rooms is straight on to the ocean. Paradise, the name seems to suggest, in this part of Baja, is looking out to sea – not sideways at the condos and hotels on either side along the beach. Or back at the desert, with its raw, bleached beauty. But then hotel names, of course, can be deceiving.

Traveller's Guide

Getting there: There are no direct flights to Baja California from the UK. One of the easiest ways to get there is to fly to Los Angeles and then catch a connecting flight to San Jose del Cabo International Airport through a company such as Journey Latin America (020-8747 3108). Until mid-March, JLA has flights to Los Angeles and then on to Cabo from around £460. This route involves an overnight stopover in LA.

The cut-price way to get there is to get a cheap ticket to Los Angeles for £250 or less ). From LA airport, take a bus to San Diego, the tram from there to the Mexican border and walk across into Tijuana. You can then continue by bus down into Baja.

Staying there: The writer travelled with Western & Oriental (020-7313 6600, www.westernoriental.com) which offers seven nights at Las Ventanas al Paraiso from £2,770 per person including international flights. Las Ventanas (00 52 624 144 0300, www.lasventanas.com) is part of Rosewood Hotels & Resorts (www.rosewoodhotels.com).

Further information: The Todos Santos festival takes place this year from 1-8 February for a week.

Mexico Tourist Board (020-7488 9392, brochure line 0870 900 9866, www.visitmexico.com).

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