I go about half-local, half-long distance. I never manage the perfect recruiting class year in and year out, but even with a dud or two on my roster, I still managed back-to-back NC's.
I think the most important thing you can do is find a balance of pure skill and pure ath/def players. Occasionally you'll find one or two amazing players who can actually shoot the ball, possess some other intangibles, and have the athleticism and defense rating to make an impact on both sides of the court, but more often than not you've got to grab at least a couple guys who specialize in defense and a couple more who specialize in offense. Athleticism and speed are huge at the DIII level. They can compensate for lackluster overall skills and provide you with some respectable talent.
But yeah, most coaches at DIII (especially with A- prestige or higher) go after mid-level DII recruits for pull-downs/drop-downs. I personally try to sign one or two pull-downs, but I usually can find guys with decent ratings and very solid potential at the DIII level. For example if you go under player ratings in DIII and search the highest rated freshman, he's a SF on my team who I signed at the DIII level without having to pull him down. But he's also an example of a player who will likely be a tremendous offensive threat, but never much of a force on defense.