Would a ceiling mount drapery rod work?
It could be installed about 4-5 inches from the window in the ceiling, curtains to the floor, very soft, flowing fabric.
There could be two rods. One on each side of the a.c. unit with the curtains closing against the a.c. unit.
I also thought instead of a curtain above the a.c., would it be possible to have shelving, or a bookcase built above the a.c. unit and the depth of the unit.
Leaving the window uncovered so the nautral light could show a collection of yours.