You can fly from Denpasar with Merpati. In General it is very expensive to fly to Dili. You can also go on the indonesian side of Timor and then cross the land border, which should be cheaper (and more adventurious). Usually you get a visa for Timor Leste at the border (land border too). However be aware that if you want to go back via land border to Indonesia, you wont get a visa on arrival for Indonesia there. Therefore you should make sure to apply for a multiple entry indonesian visa beforehand, or have enough spare time in Timor Leste for the local indonesian embassy for you to issue a new visa.
I single entry visa for Indonesia will not be enough, as it will be used when you arrive first in Indonesia even before you reach Timor Leste.