The S3's are all venting out of the enclosure. The only problem is they cannot pull enough air into the room. A simple whole in the wall will suffice to fix the problem.
Also, to the OP, your insulation will still be very beneficial to keep the radiating heat from coming through the walls. It just would have taken some extra math to learn that 16 S3's have more CFM than your window AC can move. Who knows....Maybe just removing the window barriers next to the AC would be best.