Get some frosted window film at HD/Lowes and cover as much as you need to make visitors feel comfortable.

Buy a short curtain like this:
https://www.countrycurtains.com/product/010125792+french+ticking+tier+curtains.do?sortby=ourPicksAscend&refType=&from=fn&ecList=7&ecCategory=15

and hang when needed, on a tension rod that will fit perfectly in your recessed window frame.

http://www1.americanblinds.com/blinds/cellular_shades/P-8672

$81 plus your easy install.

I agree with Chispa. Use the frosted sheet. The view is beautiful. Don't clutter it up with blinds or curtains.

What does the top of the window look like? That's where the blind would "hide" when not in use, so helpful to see it.

the tension rod/curtain idea is a good one. You can just pop it on when you're expecting guests and take it back off when they're gone.

$800 for one small shade. Ridiculous.

I agree with the window films...these guys offer gradient film that fades from privacy to clear...might be a nice way of blending the lower part of the window with full clarity on the upper.

I don't think film will work for Sochi. It sounds like she only wants coverage when they have overnight guests but wants the window clear when they don't.

A framed frosted panel of glass or plastic that you can install on that part of the window with small hooks prior to the guests' arrival and removed after they leave and stored somewhere out of site in between.

palimpsest, that is such a good idea! How about a simple roller shade.

Thanks for the advice. Tibbrix is correct, I don't really want to use a film as I want to enjoy the view most of the time. The shower is to the left in this photo and there is a lovely view to the lake and the small mountain behind it.

As a few of you suggest, I think the answer is something that can be quickly put up, removed and easily stored. A removable tension rod with a nice fabric drape could work. Pal's idea is a great one, I hadn't thought of glass. Would have to think through the weight of the glass and the support it would require. Could be pretty nice though. Must look for pictures online.

Caninnc, problem with a roller blind (and with any blind really) are the strings that are needed. The top of the window is over 9' up, you couldn't just reach up and pull it down. Also, I would need several feet of blind, I fear it would be visually distracting to have the roll stored at the top of the window.

Sjhockeyfan, what kind of folded screen do you mean?

I dont think the film will work. It will always block the view and it wont match the one below. What about top down bottom up cellular shades?

I think the tension rod is your best bet, and you can find as neutral, subtle, or colorful a fabric as you like, sheer, translucent, or opaque. It could be loose, or a stiff panel. You don't even have to mount it all the way at the top, just over head-height. (Unless your guests are afraid of drones or falcons that might soar past.)

Years ago I had a similar situation with a wider window. I used a large paper fan to cover much of the area, setting it open on the window sill. I wonder whether you could take rectangular origami paper and do the fan folds - to give the paper strength - and then just set the paper on your sill. Or you could do something like a narrow version of an accordion fold card or book.

Great and creative ideas guys, thank you. Origami is a interesting thought graywings.

Bpa, you made me laugh with the drones comment. We're not too worried about that yet. And falcons don't post on Facebook, so low risk! ;)

rockybird, it was a top down bottom up cellular blind I got the quote on. Too much visual distraction and the quote was way more than I want to spend.

This might sound like a silly idea, but, what about a picture sitting on the sill the width of window. Just simply place it in window when guests are coming over. I would even tell them that you propped a picture on the sill so they would be more comfortable. My cousin has a bathroom that the window, although covered overlooks her patio. So, in the summer when we go over for a bar-b-q and one needs to use the bathroom you feel like everyone can hear you right outside. (she keeps window open) Sort of uncomfortable. And believe me, when you are on patio you can hear someone in the potty if you are seated right under window!

Decormyhomepls, not silly at all, thank you for the suggestion. Interesting idea, I will explore that idea too.

I keep the bathroom window closed when we're sitting outside!

What about a panel curtain from ikea? You can just unclip it and take it down when you dont have guests. There's lots of colors and patterns. Or the roman blind. Maybe you could scrunch it up at the top when you dont have guests.

http://www.ikea.com/us/en/catalog/products/70119072/#/30119074

http://www.ikea.com/us/en/catalog/products/30290606/

The tension rod seems like the best idea. Why spend money for something you will use only now and then?

I have a similar situation and have been mulling for a bit. The tension rod is the quick and easy solution.

I do like Pals idea which made me think of something like a Shoji screeñ suspended in the window frame. My sister used paper to add opacity to a window with oddly shaped sections and it rendered a very soft muted effect. The paper she used had fibers and a slight leafy look which was gave it a very organic vibe.