Originally Posted by killingtime
Don't build a housing for a compressor! It will make the unit heat up causing excessive condensation in the air being supplied to the airbrush and it will decrease the usable life span of the compressor.
That's true depending on the housing you build, I should have elaborated. You don't want to totally enclose the compressor with no air circulation. The housing won't totally eliminate the compressor noise, but will muffle it to a more comfortable level.
I have an 80 Gal. upright I built a shed for that looks like an outhouse. It sits outside my shop on the drive where its sat for 7 yrs now. I've had no problems with heat, condensation or anything else.
If buying a new compressor fits your budget, then by all means that would be the route to go. There are many units that offer almost complete silence.