Peter:

Two things. You say the muffler is touching, this will cause the entire plane to resonate and raise the noise level. I'm sure you've been in an auto when the exhaust hit the body, remember how loud it was?

The other is going to a three blade prop. This allows a smaller diameter at the same pitch, lowers the prop tip speed, and thereby lowers the propellor noise.

Concerning he APC props. it's subjective and not supported by any measured tests, but to me the Master Airscrew props are quieter than APC of a similar size.

Bill.