After many forths and backs, ups and downs, and sticker shocks, we have been able to secure an apartment in Malad-West, a suburb of Bombay. We opted for a serviced apartment and will be staying in an apartment with one-bedroom, two bathrooms, living/dining room and kitchen. I just love the specification of "English toilets", something to remember for future visits.
We found this apartment through http://www.dreamhomerelocations.com/. This company specializes in serviced apartments and have been really wonderful to work with. Unlike many places in Mumbai, they communicate via email and are really quick to reply to any questions we had. I will post pictures as soon as I get over there.
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