Filtering Overlapping Frequencies in sound file
In my opinion, the best approach for this kind of spectrally-overlapping noise is to use blind source separation techniques, like independent component analysis (ICA) or time-frequency masking, or sparse source decomposition.  Look up the work of Emmanuel Vincent, Kostas Kokkinakis, or Philipos Loizou.  These methods work best when some statistics of the noise are time-independent, and the SNR is small or negative, as appears to be the case in your example.  Vincent has some MATLAB code available on the web.