Joe - I did a similar project recently for my 650 sq. ft. shop, so had to move the cyclone outside of the space. I built an enclosure, attached to the outside wall of the workshop, encased in Roxul insulation. The noise from the cyclone motor is barely noticeable outside the shop, but as TJ noted the return air back into the shop produces a lot of noise. I opted to relocate the filter inside the shop to not lose conditioned air, so it was a trade off.?
If you can some how build a baffle with sound dampening material around the filter too, I think that would help reduce the noise further.
Sang Luu