(Disclaimer: I'm no gunsmith, but here's the procedure as I understand it.) Carefully back out all four Allen screws holding the upper and lower gas block pieces together. (Be careful; you can strip the heads since they are staked in place. Mike Knifong suggests turning the screw forward just a hair, then backing it off until resistance gets heavy, then forward again, etc. until you get the staking loose.) When you take the gas block off, there is a little bushing that looks like a little metal dowel with a hole in it lengthwise; this is the gas bushing. (This is NOT the piece that sticks out horizontally from the lower gas block piece and fits into the recess in the operating rod; you can't see the gas bushing unless you take the gas block apart.) Take this to a machinist and have him machine you one that is dimensionally identical, but with no hole. Put the rifle back together using the solid bushing, which won't allow gas to pass through the gas block. (Be careful not to overtighten the gas block screws, or you'll snap the upper gas block piece in half.) Presto, a bolt-action mini-14.
I question whether the action cycling makes a big difference as far as decibel level. Yes, the "clack clack" of the action cycling is loud in isolation, but a mach-three-plus bullet exiting an 18.5" barrel followed by lots of supersonic gases is louder. The friend's bolt rifle may have a longer barrel. Even out of a 26" barrel, however, I would imagine that the .223 is loud enough to cause hearing damage if you regularly shoot it without hearing protection.