I use to build 1400amp movie generatos and we enclosed the motor & generator with an aluminum housing with one 1" layer of foam with vinyl or urethane barrier and 1" felt. I've seen another successful generator company use felt exclusivly on their generators to reduce sound. Perfect for big diesel/turbo motors so smaller generators will not be a problem.
On certain generators a sound baffle is made from several levels on top of each other at 45 degree angles for incoming air, covered with felt, this reduces noise significatly on the intake side. On the exhuast you can do what one of our competitors did by making a hole through the housing for the exhaust pipe and put a rain cap over it. Electric acuators open up doors on top when the motor starts for proper intake and exhaust of air. Here are some pictures of generators I helped build. These generators were so quiet you didn't know they were operating when you were only 75 feet from it.