In my non-permaculture time, I spend a lot of time at home-recording forums, where this topic is discussed endlessly. Beware, as there is really quite a bit of legit science behind this, and there's a lot of "common internet knowledge" about how to treat rooms that really amounts to a lot of bunk. Also a lot of fancy expensive products you probably don't need.
Good news is there are a lot of DIY options if you're handy with some basic tools.
From what you're describing in your situation it sounds like you want to reduce reverberation/slapback echoes. If you just want a "deader" space, and aren't planning on doing any extremely critical audio listening in that space, this is good, because it is one of the easier tasks to accomplish. Please note that much of the discussion you will read on the internet regarding "treating rooms" or "sound absorbing panels" is concerned with a very different goal, that of balancing the resonance and frequency response of the room across the entire audible spectrum (for use in recording spaces, home theaters, etc). That's waaaay tougher.
Acoustic ceiling tiles can work to a certain extent, but they don't usually look like much to begin with and covering with fabric only helps so much. Putting a harder reflective surface (such as a picture) over them would severely limit their effectiveness as the picture would simply reflect the sound the same way the wall would.
Although I am no expert, I have done home recording for years, and DIY treated several different spaces. I am actually making a number of larger panels to treat the concrete walls in my basement right now. My preferred method:
Build a box frame out of higher grade pine one-by's (1x4 or 1x6) and fill it neatly with
UltraTouch cotton insulation. The stuff scores VERY well in terms of acoustic absorbtion (better even than rockwool or some of the OC rigid fiberglass panels that were the standard for DIY sound treatment for years), and is much more fun to work with because it's not an itchy disaster (Rockwool, uuuugh). It used to be harder to find than it is now... I get it at Menards. If your local home supply centers don't carry it, check the above site and call around to some local insulation companies... you can usually find someone that carries it. You don't have to fill the frame completely full... it's actually more effective if there's a gap of airspace between the insulation and the wall.
Then face your boxed frame tightly with fabric. UltraTouch comes in batts and can be a bit lumpy depending on the fabric you use and the size of your frame, so you can face the box with chicken wire or machine cloth first to help keep the insulation from bulging out when you fill the frame with it.
The fabric you choose also makes a big difference. Don't forget that sound is essentially just moving air. So tightly woven fabrics or some synthetic fabrics that tend to reflect air as opposed to letting it pass through them will hamper the absorbtion of sound when used to make these panels. Put the fabric up to your mouth and see how hard it is to blow air through it to give yourself an idea (plus you look like a nutjob in the fabric store).
Burlap works great, but it's ugly as sin. For a pleasing aesthetic, you could use a natural muslin or loosely knit cotton fabric and dye some sort of abstract artistic design on it before stretching it.
The one I'm building now is for a huge panel to go on the wall over a couch, and I found a really cool old faded cotton US flag at a flea market that I'm going to use. To anybody who doesn't know how it's built it will just look like a nice piece of wall art.
Regarding fire- most materials you will use to build sound panels at home are already fire-rated, because their intended purpose is insulation of buildings. Where fire-resistance comes into play here is the fabric you use to cover the panels you make... many types of fabric are NOT fire-resistant at all. So do your research there.
Please also note that any soft surfaces you put into the space (couches, rugs, carpet, people, etc) will also deaden the space, and even hard objects that break up long continuous surfaces will help to some extent (they won't absorb sound, per say, but they can help break up the reflections).
