A shell of dynamat won't really work very well. Dynamat and similar products work by increasing the mass and density of the surface they're attached to, which increases the acoustic impedance between air and the surface. They don't absorb sound; they prevent it from being transmitted. Materials like acoustic foam do absorb sound, but most of them aren't really suitable for use near a generator and it would take a considerable amount to absorb the volume of sound from the generator.
Have you tried earplugs or headphone-style hearing protectors? Even the not very expensive ones cut down on the volume of noises a whole lot, more than you'd be likely to accomplish with moderate amounts of soundproofing and sound deadening...not that the latter is at all useless to pursue.
