Forget about cheap
hotels within walking distance. They don't exist and if they did, they'd already be sold out. There are a few lower-priced hotels on the outskirts of town on Riva Rd. and Old Bottom Rd. (Best Western, Holiday Inn Express and Village Inn) that are only a block or two from a city bus stop and 15-20 minutes from downtown.
Also, many residents in Annapolis
rent out their homes (and boats) during the show. Check Craigslist. I live three blocks from the show and plan on staying on our boat at that time.