I respect the complaint, because my garage acts as a megaphone and projects the compressor running noise right at her open windows. That kind of sucks. So I finally got around to soundproofing the thing.
Here's the corner where it sits, originally open like this. The motor is kind of tucked up under the shelf, but let's not kid ourselves...that doesn't do squat for noise reduction.
I got some ¾" plywood and used some 2x4s I had lying around to frame a box to enclose the compressor. There's still plenty of open air access up under the shelf...I'm planning on closing that off with acoustic foam, as well as lining the inside of the box with foam. That should reduce the noise level significantly.
I cut two access "ports" in the box, one to be able to get to the switch, safety valve, and regulator...
...and the other to have access to drain the tank. They're just simple sliding doors.
The day after I enclosed the compressor, I decided to do some temperature monitoring inside the compressor box. I had hoped it wouldn't get too hot in there now that it was completely lined with acoustic foam (that made a huge difference in the noise level). I bought a cheap ($10) digital indoor/outdoor thermometer from Radio Shack and mounted it in plain view in the middle of the shop. I ran the 10' long probe wire into the compressor box. I can switch the display back and forth between ambient shop temperature and the temperature inside the enclosure.
The temperature fluctuated between ambient shop temperature and about 96 degrees Fahrenheit (peaking immediately after the compressor shut off after a cycle). The compressor temperature would fall about 2 degrees per minute on its own. This is an acceptable peak and rate, but I figured on the hottest summer day, if I wanted to use the die grinder (with the compressor on nearly constantly), it would get really hot in there (probably 105-110 degrees).
So, I decided to rig up a cooling mechanism. This worked in my favor in more ways than one, because up until now, the biggest air opening into the box was up under the shelf, where I couldn't really fully enclose easily. That's where most of the noise came from. I decided to build a cooling box there to solve both problems.
I bought a $15 "fart fan" (bathroom fan) from OSH (they had 50 and 60 cfm models...I opted for the smaller/cheaper one), some 3" ducting (like the stuff used for dryer exhaust), some 3" metal clamps, and a nice finished air outlet looking thing. I rigged the contraption up so that there's thick soundproofing between the fan enclosure and the compressor box. Through the foam run two ducts. One hangs down by the bottom of the compressor...it delivers cool air from the fan. The other is a short duct through the foam at the top of the box, which provides an exit for the hot air. I was going to hook up an automatic thermostat to activate the cooling fan, but screw that...cost and complexity went up exponentially with that approach. I used a simple wall switch, and I'll just flip it on when I fire up the compressor. No sweat.
The system works really well. After a compressor cycle, the fan accelerates the cooling rate to about 4-5 degrees per minute initially. It reduced the peak temperature by about 2-3 degrees. Can't complain. It's just a little more peace of mind, and I'd estimate another 20-25% noise reduction.