Just do something to fix it. Sounds like they're being really reasonable. I'd rather have someone write me a letter than call the cops. I don't know what it's like where you live but in PA you can only have like 92dB or something before you're able to be ticketed. Also, they're your neighbors, don't start **** with your neighbors. It's not some jackass at the gas station, this is someone you will need to see everyday so it's in your best interest to keep things friendly.