I know this isn't a linux question but I figure someone out there might have addressed this issue.

My computer room is a 10x10 room. I have build myself a computer rack out of wood and put up wood panelling on the side where my desk faces. There's enough of a space for me to get behind the rack to play with the cabling of my two servers, laptops, routers, and modems.

In the summer my problem is heat in the room so I also have a small desk fan venting the air in the room. Well as you can imaging the room is rather noise with all the hardware having fans.

My goal here is to reduce the sound by about 25-50%. Any one have any tricks on sound proofing? What about measuring where the sound is coming from?

you can record sound with directional microphone dragging around room and facing in different directions then analyze via sound wave editors(goldwave, sound forge etc)..
try to make sound bulletproof space with sound damping materials or cover active hardware with it (i hope it will not overheat).
or make filters to clean common noise from record.

I would definitely not recommend covering any hardware with any sound-damping materials. If heat is a problem NOW, than it will definitely be a problem under those circumstances (problem for the poor hardware, that is).

There are available kits for soundproofing computer cases, if a significant part of the noise is from the box(es) itself. They consist of materials, sometimes custom cut, that line the case.

A cheap way of locating where the noisiest sound is coming from involves putting an earplug in one ear, and using a piece of hose or tubing in the other ear; you get close to various pieces of equipment and compare how noisy they are.

Another idea is (if you have room) those movable padded walls commonly used for dividing office cubicles. They can be found cheap, used, from many places, but are not that cheap when new. You could put one between you and the hardware, while still venting the hardware area with a fan as you are doing.

Since reflected sound is a major contributor to overall noise in a given space, padding the walls of the room will have a significant impact on the overall noise too.

Best of luck with this,
Sasha