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What about leading the flop and folding if it comes 2 back to you? I'm also a little confused about the action. You open-raised in the HJ and the CO 3-bet it? I've never seen someone call it the HJ+1.

When you open-raised in the HJ, and the CO 3-bets it, his range is really large, because yours is large as well. When you check, it's an auto-bet for the CO and for many players, it's an auto-raise for the button if he has a pair of jacks or better. Now you're in a situation where you have to risk either folding the best hand, or calling down a lot of action with a possibly dominated hand.

The merits to leading are (this is just IMO):
1) Hopefully the CO will auto-raise and push the button out, so you can see showdown cheap (as in not 3 bets every street). Though, considering the button called 3 cold preflop, it's not likely that facing 2 cold will push him off any draw.
2) If it's bet and raised before him, the button will be less likely to be raising a weak hand or making a play. Therefore, you can feel better about a fold. Not leading puts you in the situation where you've gained no information about the CO's hand, and basically the button has let you know that he has some pair or better.

Does anyone like leading, or am I just crazy? I'm curious to see the lines that others would take.

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You are not crazy, when theres a decent chance that you may have the best hand and your in a short handed raised pot it is best to be the aggressor. The hero shouldve bet the flop in my opinion. I realize that the hero's strategy actually saved him money since he got to make an easy fold, but thats not the point. In the long run I think the hero is better off being the aggressor on the flop and betting into the prf raiser.