I did a similar ride in 2011. Tungurahua was making noise at that time as well. I actually did not notice it until I was leaving town heading back to Quito.
I made a fantastic friend who runs a bed and breakfast in Cuenca. If you get there and want a great person to rent a room from you can contact her at the email I PM ed to you. I also rented from Freedom.
Another great place to visit is Canoa on the coast. There are a bunch of great hostels.