Will painting an acoustic panel lower absorbency?

The fabric is the right way to go. It does depend on what frequencies you are trying to absorb. Quite honestly if you are planning to cover the entire room in fiber board you are going to have an aweful lot of high frequency absorption, and while painting will reduce this, in your case it might be a benefit. Fiber board is a great acoustical tool, but needs to be used appropriately. It's frequency absorption typically starts around 640 Hz (depending on the fiber density) and is not doing very much at this frequency. Without knowing much else about your room I really can't add very much, except to be cautious with over damping even a challenging room. It will make it sound lifeless and dull. I'm actually re-engineering a dealer showroom that was 2/3 covered in fiberboard. It was a dreadful room to begin with, but the overdamping made it worse. We're going to fix it.

Jcambron: You probably need a combination of other acoustical devices, such as diffractors. You want to get a balance of absorption, so over damping won't work terribly well, which it sounds like you've discovered. You can actually tune (build) diffractors to certain frequencies, which is what we typically do in order to get a good balance in the room. These are not trivial things to figure out. The difficulty is the whole room works together and although it might seem that eliminating reflections with fiber board would get rid of some of the nasty reflections (it will), but at the expense of over damping the room. Our website has more on the subject, but does not go into diffractors. If you go to www.rivesaudio.com and go to the listening room. You can get to the listening room either by clicking on the tag line on the 1st page (not the intro page) or by clicking on "Issues" on the first page. It's a pretty basic tutorial section, and you may already know the information there, but hopefully it's helpful to you.

Many recordings are very bright and harsh. Particularly CDs that were recorded in the first several years of CD. A dead room might actually help these, so if your collection has a lot of early recorded CDs, the deading effect might be welcomed. There are a number of threads here on A-gon that discuss reference listening material. You might want to take a look at some of those suggestions and buy some (or you may already own) that you would enjoy as well as being able to use as reference listening material. What I find is important is to find a good variety (unless you only listen to one type of music). I generally use a vocal, large symphony, jazz, acoustical guitar, and solo piano. I enjoy listening to all types of music, but these are my favorite types and they work well for me to evaluate a system and room performance.

Very good references Clueless. Particularly Everest's book. Although not in depth, it's a great reference book and has about 90% of the equations we use in solving problems. It's also easy to read for the non-technical person as you pointed out. I do think you need to change your moniker--it's not working with posts like this.