[TheRonin]

I was in Atlantic City last week and was playing at the $1-$2 NL. The max buy-in was $200 and over half the table had more than $200. One guy had a stack of around $1500 and was raising or in every pot. Table was absolutley wild ultra loose and pretty aggressive.

I took in $200 and had my stack up to around $340 when I picked up Ad 9d in seat 4. The bully was in seat 1 and threw in $2 (BB) as so did the rest of the table. (no raise pre-flop)

Flop comes down Ac 9s 7s.

You can imagine I was pumped to see I flopped the top 2 pair w/ the maniac to have to act in front of me I was feeling confident about the hand before anyone was too act. Action goes
Seat 1 (bully) checks
Seat 2 (semi-aggressive) leads out with a $30 bet into a $10 pot. At a tight table the bet may have worried me but at this table I figured the guy was on a Spade flush draw. Seat 3 re-raises from $30 too $120. (majority of his stack)
Seat 4 I'm next to act w/ top 2 pair on the board. (my thinking was seat 2 has got the As Xs and seat 3 must have flopped 2 pair (just because I didn't feel he would make such a big bet into a pot w/ a set) I just wasnt sure if he had flopped the top 2 or bottom 2. I really felt I had seat 2 and 3 beat at that point in the hand. But my concern was this ... I was almost certain that seat 2 had the nut flush draw (and had chips to spare in front of him) he had myself and seat 3 covered ... My thinking at this point was if I push here seat 3 has so many of his chips in the pot at this point he has to call, seat 2 would observe this and at that point ...
would be getting even money to call with his flush draw.... Fearing I would be giving him the odds to call or that I was maybe possibly up against a small set I muck the top 2 pair.
Remaining players fold / seat 1 folds
turn comes 3d (Ac 9s 7s)
Seat 2 checks Seat 3 puts in his remaining money around $40-$50 and seat 2 calls.
river 3h (Ac 9s 7s 3d 3h)
at this point
seat 3 turns over 9x 7x
(he had the bottom 2 pair on the flop -- the table figured that seat 2 would turn over the As for the winning hand w/ A's up (3's on the board) but to everyones suprise
seat 2 shows 8s 10s (for the open ended str8 flush draw on the flop)

Outcome:
Seat 3 wins pot w/ 2 pair / (I mucked the winner)
at this point i left the table / i figured if i couldnt play the top 2 pair on the flop w/ confidence then i was eventually gonna get outplayed.. maybe i was over my head.

I guess my real question is : if I was confident in my read about seat 2 w/ the flush draw was my fold incorrect? How was my thinking wrong ? All thoughts welcome.