I would do three weeks in Belize plus Guatemala (Tikal area). Tons of wildlife inland--especially in the Tikal area. Plus access to the snorkeling offshore in the cayes, and Mayan ruins.

Another option, especially if you're on a budget, is a combination of Chiapas and the Yucatan in Mexico. These areas are as safe as anywhere in the US, and provide opportunities to do everything on your list. Sian Ka'An, Palenque, Bonampak/Yaxchilan, Aguas Azules+Misol Ha, tons of great snorkeling locations, Chichen Itza, Akumal (snorkeling with sea turtles from beach), Tulum ruins and beach, Coba, Merida, Campeche, Xcaret, Yal Ku, cenotes (inland caves filled with water), etc etc. Wildlife including monkeys, birds, crocodiles, etc.

You could also do Costa Rica of course. that's probably your best option for wildlife, but your poorest one for snorkeling. It would be the most English-language friendly after Belize (Roatan is obviously going to be very hospitable to English speakers, but not so much the mainland).

Plenty of choices. I would probably stop by a bookstore, peruse a guidebook on each location, and go from there.

It would be quite expensive to fly from Belize to Panama. We flew from Nicaragua to Belize City in November, it was over $400.00 a person for that short flight.

At least one, possibly both, of your kids are too young for ATM cave.

If you really want two countries, getting from Bocas to Costa Rica by bus is fairly easy (although I've never done, met lots of people who did).

Belize has numerous caves, some recreational for tube floating and others fascinating with Mayan artefacts and human skeletal remains. We also have many Mayan sites and other similar attractions you won't find further south.

@RAC: We have done that (guidebooks) but not really found it very helpful. When you read them and never been to the area, they mostly look the same to me. This is actually one of the reasons for this post. I am new to this "travel forum" thing but actually find it quite rewarding already.

I also realized that I probably should have given you some more information in the first post. We are going to arrive in CA around the 15th of December and plan to leave around the 3: rd of January. Is this a problem or how big of problem/excitement are Christmas and New Year’s going to be in the area?

Snorkeling is going to be our top priority. Probably mostly from the beach if possible but we have done whole day trips with diving companies in Thailand 1 1/2 years ago. So this should really not be a problem now that the kids are older.

Next to snorkeling we plan to do some animal/bird watching. If we have some small caves to investigate it would be cool but not really a top priority.

We prefer to leave in "bungalow" style if possible A/C and private toilet and shower. This is common in Thailand how about CA? When I look at websites I seem to end up with hotel/motels or "expensive" bungalows.

We really have not been considering Mexico but you might be correct RAC so we will try to look in to Mexico as well. (Instead of getting surer we just added another country to the "possible" list)

Anyone who has been to Guna Yala (former San Blas)? Is it easy to travel there now from Panama City? Do you arrange everything yourself or do you buy a package trip? I do not find that much information on where to go or what the prices would be. And if you go there how long would be ok?

Is it the correct choice with the Pearl Islands (Contador and the archipelago around it) as the place to stay the longest?

I think Belize and Yucatán are both great options; I'd pick Belize with Tikal as RAC suggests. I take lots of photos and post detailed travelogues and blogs with photos as I travel - maybe some ideas for you; the link is below with my favorite Belize links - lots of ideas and places that would appeal to kids, I think. Happy planning!
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My photo collections with blog, travelogue, and review links: http://www.flickr.com/photos/staceyholeman/collections/

My travel blog starting in 2012 (earlier ones linked with the photo collections):
http://hopefulistinlatinamerica.blogspot.com/

My descriptions and reviews on Trip Advisor:
http://www.tripadvisor.com/members-reviews/hopefulist

Guidebooks I like: Moon Handbook, Fodor’s Guide, and Explorer’s Guide.

Laminated wildlife identification cards: http://rainforestpublications.com/belizeFieldGuides/index.html

A very cool checklist book for Belize for the young or young-at-heart: http://www.amazon.com/Play-Belize-Mesa-Somer/dp/0615198546/ref=sr_1_2?ie=UTF8&qid=1330549187&sr=8-2
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Budget to midrange lodging site: http://www.belizeexplorer.com
Great island and lodging downloads: http://www.belizefirst.com
Informative transportation blog: http://www.belizebus.wordpress.com
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Shuttle recommendation: http://www.parrot-nest.com/belize-shuttle.html
Zoo: http://www.belizezoo.org
Great jungle camp in Cayo: http://www.belizecamp.com
Great budget lodging in Cayo: http://www.thetrekstop.com
Great value hotel with pool in Cayo: http://www.aguadahotel.com
Don't miss cave trip: http://pacztours.net/actun-tunichil-muknal/
Another, less-visited amazing cave option in Cayo: http://www.actunchapatadventure.blogspot.com/
Lodge with lots of adventures: http://www.cavesbranch.com
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Roxy Ortiz - fabulous, fun tour guide: http://www.tikalroxy.blogspot.com
My favorite hotel at Tikal: http://www.tikalinnsunrise.com
Good choice in El Remate, Guatemala: http://www.30minutesfromtikal.com/
Favorite midrange places in Flores: http://www.corpetur.com
Good value budget option in Flores: La Mesa de los Mayas, mesamayas@hotmail.com
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Great inn in coastal Garifuna town: http://www.hopkinsinn.com
Garifuna drumming center: http://www.lebeha.com
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Apartment on the beach on Caye Caulker: http://www.staycayecaulker.com/sailwinds.html
Another Caye Caulker option: http://www.gocayecaulker.com/accommodations/maxhapan-cabanas
Great day snorkeling trip: http://raggamuffintours.com/hol-chan-snorkel/
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Secluded resort on N. Ambergris Caye with snorkeling and flyfishing from shore: http://www.tranquilitybayresort.com
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Very rustic atoll experience, cheap if you have a week: http://www.glovers.com.bz/
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Great jungly place near Punta Gorda: http://www.hickatee.com
Rental apartments in the heart of Placencia: http://www.oneworldplacencia.com
Good Monkey River Trip guide: Jason Williams <wjason628@yahoo.com>
Good Placencia area fishing guide: Wayne Castellanos (dial 011 501 1st from US): 661.1151 or 634.2852
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Off the beaten track diving and snorkeling, Sapodilla Cayes: http://www.reefci.com
(haven’t stayed there yet thanks to Hurricane Ernesto in August 2012)

@hopefulist: Thanks a lot for all the links!

It's been several years since we went to Panama. We flew from Panama City to the Kuna Yala/San Blas islands. For that trip, we actually used a Panama based travel agent, since we moved around A LOT in our two week trip. It worked out well.

We stayed at Dolphin Lodge while in Kuna Yala. At the time, it was one of only a couple places in the archipelago that had private/indoor bathrooms. I'm guessing there are more these days.

It was fascinating. Somehow the Kuna have managed to keep many of their cultural traditions intact. Touring one of their villages is one of my favorite travel memories.

That said, if snorkeling is your highest priority, I'd go to Belize, and add in some Guatemala time.

Although the snorkeling while in Kuna Yala was good, I was very unimpressed with the snorkeling at Bocas del Toro. Part of that might have been weather related, we had torrential rain while we were in Bocas.

I can't compete with the stupendous array of links hopefulist has provided you, but here's a few:

Trip report from Chiapas+Yucatan (9 nights):

http://www.fodors.com/community/mexico-central-america/overdue-trip-teport-chiapas-and-yucatan-february-2012.cfm

Belize+Guatemala (wound up being 8 nights):

http://www.fodors.com/community/mexico-central-america/trip-report-for-belize-and-guatemala-february-2010.cfm

For Chiapas, I'd use the Moon guidebook (some content online):

http://www.moon.com/destinations/chiapas/discover-chiapas

With three weeks, you could see soooo much. To me, that would tend to tip the scale towards Mexico, where there's just a lot more to do and see--you could easily do 10 days in Chiapas and ten days in the Yucatan and not come close to experiencing every "must see" or "must do."

Belize is probably your best bet if snorkeling is your top priority with wildlife/bird watching secondary. There's some but not a lot of snorkel off the beach options in Belize, mostly offshore cayes/atolls and the northern end of Ambergris. With a boat ride, that opens up a lot more possibilities and some are only a short boat ride away. Unfortunately the best wildlife/bird watching in Belize that I know of comes at a higher price. The Crooked Tree area is supposed to be very good for birding (I haven't been) and may offer lower priced options.

Best affordable birding/wildlife in Belize is probably in Guatemala (Tikal). Staying inside the park will offer comparable wildlife to what one would see at Chan Chich or Lamanai, but without guides to help spot the animals/birds. At a fraction of the cost.

Plus, Gallo is better than Belkin.