I'm sure that you would achieve some deadening of sound by removing the drywall, installing homosote, and then putting the drywall back. It just seems like a LOT of work for probably only marginal results. Effectively what you have done is A. created another layer for the sound to have to be transmitted through and B. You have added some, small amount of insulation (the absorbent homosote).
I think if you have people playing basketball 25 feet away from your house, they are yelling and bouncing and carrying on etc. and if you don't block more sound than your scheme, you might just go INSANE!!!
As I said, If you can't build an entire new interior wall, then your best bet is to apply the z frame channel directly to the existing wall and then put new drywall over it. For added protection, the wall could be firred out a little with 3/4" strapping and the z frame attached to it to give an inch for some insulation between the existing wall and the new drywall. No need to remove the existing drywall, what a mess! New drywall with zframe and some insulation will definately work better than your scheme. This stuff is made for this application and is quite good at it. Any window could have 1/4 inch plexi covering it on the inside (sealed up with calking) and it is no more work to apply an "extension jamb" of 2-3" to the window frame to cover the gap than in your scheme. Both your scheme and mine will reduce the sound, I just think that mine will reduce more and be less work and mess. - regards JB